raised the retirement age from 65 to 67.

About time (on both things).

Interesting... Wonder how long it will take for the penny to be taken out of the system.

Swedens prime minister wants to raise ours from 65 to 75.

its to 65 here.

when do we start throwing fire at our police officers?

what about the looney!!!???

are they raising the retirement age because they need more time to figure out how to pay for the retired people?

well raising the retirement age will decrease the amount they have to pay in benefits in general, by denying people the retirement benefits for 2 years where they would have otherwise received them.

How is it that liberal Canada is able to raise the retirement age but the US cannot?

I'm predicting an increased demand for US Pennies in Canada. It'll take years for the Canadian Penny to get out of circulation simply because it circulates throughout the US and in other countries pretty easily. Of course in the US it's masqueraiding as a US penny, but the point is still valid.

Because the American system is set up to promote gridlock even in cases where 1 party controls both houses, whereas in the Canadian system a majority government can pass legislation with ease and minority opposition parties have no recourse.

Majority governments even have the ability to force "closure" which disables minority party member's ability to filibuster or stall legislation.

Plus there is only 1 elected house so we don't have cases of split houses/congress.

The joke is that a majority government in Canada is a "4 year dictator".

The sad thing is they didn't take down the MP pensions till after the next election. Funny how the part that includes their money can wait.

Judging by what I've seen from both parties in the US, it is more likely we'll see the privatization of the SSF (more than likely in the next 4-8 years), quickly followed by a raise in the retirement age to 67, or possibly 68. They're are now at the phase where they are transferring the current military retirement structure over to a 401k/investment style. Next will be the SSF, I'm sure.

And everybody told me I was crazy 6 years ago when I said "They're trying to lower our credit rating..." :)

I believe canada's mantatory retirement cap was completed removed several years ago. Previously it was a legal requirement to retire at 65.

What you are refering to is the now they are also moving the age when you are eligible for Old age security and canadian pension plan pay outs.

Why would there be an increased demand? Once the change takes effect, all sales are rounded to the nearest $0.05 instead. If someone has pennies and wants to use them, fine, but it's not required.

I don't see how saying "pennies are no longer required" will do anything but decrease demand.

-Fooglmog
Guy with no clue.

Take the penny out, raises prices to round it to 5's =P

What the prices will become is decided by business. Most of them likely won't change for taxable goods and services.

We will have to see what the amendments to the excise act have to say regarding the rounding.

Rounding to the nearest nickel has a neutral impact on prices... you round up as often as down.

-Fooglmog
Guy with no clue.

Not necessarily foog.

Doing what you suggest would create incentive for business to price their products to intentionally cause a round down after sales tax is tacked on. As a result there would be a net effective price decrease for products while the business retains the same profit off the sale. Government takes the entire financial hit and the business benefits from a decreased price.

If instead the price were to always round up, then firms would have incentive to price their products to always come out to a multiple of 5 after taxes are applied. Doing so would avoid an increase in the net effective tax rate on their products. This of course would also cause competitiveness issues.

It is also questionable whether this penny change will effect digital money/transactions.

h4, this is all your fault!

H4x, I'm not sure if I understand how it would work. Is this about right?

Today: a $2.99 notebook becomes $3.3787 after tax. I'm charged $3.38 of which $2.99 goes to the business and $0.39 goes to the government.

Pennyless Rounding Up: a $2.99 notebook becomes $3.3787 after tax. I'm charged $3.40. Which of the following would occur? $2.99 goes to the business and $0.41 goes to the government OR the same $0.39 goes to the government but now the business is getting $3.01?

Pennyless Rounding Down: the company lowers the price to $2.97 which becomes $3.3561 after tax. I'm charged $3.35 (whereas I would have been charged $3.36 before rounding). Which of the following would occur? $2.97 goes to the business and $0.38 goes to the government OR the government takes the $0.39 that it would have gotten before rounding and the business keeps $2.96?

Would pennies themselves be rid of over electronic transactions? Would money be created to round it up or would money disappear for it to be round down?

hawkeye: we don't know which of the following will occur yet, we will have to see what the legislated amendments say. As such I guess the incentives I outline above aren't absolute, because it is dependent on who is legislated to reap the gains/take the hits in prescribed circumstances.

"Ottawa is suggesting businesses round off cash transactions to the nearest five-cent increment but says it’s leaving this to businesses to work out for themselves.

This rounding off would occur after taxes had been applied to the purchase and would not be necessary for credit or debit transactions."

Sounds like the gov is going to take what it is owed and any price changes and gains/losses will be on the shoulder of business.

how is the gov owed anything? how bout the gov is going to take/steal what ever they want, you can have the rest.

the government made an agreement with the people to take care of them in their old age if the people gave them the money. so, we have to pay for the sins of our parents.

apparently all electronic transactions will remain "to the cent" - not sure how that will work. For someone like me who buys 3 coffee a shift at $1.56 per, it would cost me $0.01 extra a coffee to use my coffee card or debit. Squash that noise. Do you have any idea how much coffee I buy?

lol, of course the businesses will make more money cause they will want to mark the price up to get the final sales number to 5's. Gov will make more money too off the higher mark up price. No one will lower prices =P

Electronic transaction are not suppose to be affected. As for the retirement age it just a smoke screen it so long for now that it could be change in the next election.

Will the government be paying for the reprogramming of POS machines and the implementation costs? OR is this just another make work project?

This "rounding" seems suspiciously similar to the premise of the worm in the 90's movie hackers.

Well, bottom line if a company is in such a position that it needs to manipulate its prices to gain an extra penny per transaction they probably could have just raised prices to begin with regardless of this penny rounding.

No H4, you haven't thought this all the way through. It may create an incentive for businesses to do that... but incentives don't matter when it's not mathematically possible to fix prices. At least, not in the part of Canada where I am.

Price fixing to always round up (or down) falls apart as soon as people start buying multiple items. If you buy 1 or 2 items at $1.01 it rounds down. Buy 3 or 4, it rounds up. Every price will round down as often as up.

(Okay, maybe 1 item purchases are more common than any other single number, skewing this slightly, but the psychological effect of .99 pricing is almost certainly going to be a larger variable in total sales than lowering the consumers cost by 1 or 2 pennies on purchases of 1 item anyway).

As for fixing prices to always come out as $0.05... how easy is that to do with a sales tax of 13%? How many prices actually come out to an even nickel after tax?

Again, this is easy if you assume people are only buying 1 item... but if you assume people are likely to buy anywhere from 1 to 10 items... your options become seriously limited. Essentially, you have to price your items at $1.77 or multiples of that. This means that every item priced between $0.01 and $1.77 would have to be moved to $1.77... a huge price increase in a lot of businesses where many items are under that price.

And even this falls apart eventually. At $8.85, a penny creeps in after tax for 10 items again. This keeps getting worse until, at $44.25 you're back to only being able to purchase one item without having to deal in pennies.

I'm sure we will see a number of items near the $1.77 price point move to it. It's actually already a common price for things like chocolate bars, because businesses have realized that it saves them dealing in pennies. But to suggest that all items will be arranged so that, after tax, they come out to even nickels is simply wrong.

-Fooglmog
Guy with no clue.

Raising the retirement age to 67 is a moot point really. Most people will be lucky to keep any decent paying job past the age of 50 or so (unless you are one of the few that get into management at a company that doesn't get bought out/into trouble).

The penny thing.. meh. It's more of the same old along the lines of replacing the $1 and $2 bills with coins. It's also a stealthy way to gain extra revenue off the sales tax (kind of like what the banks do taking fractions of pennies). It's not really a big deal for consumers in teh grand scheme of things.
Lets say I make 500 consumer purchases in a year. The *most* this is going to cost me is $2 (0.04*500) which is not a significant portion of my income. Lets say that it's more like $1. If you assume that this affects about 20 million people then that's $20 million extra dollars spent and additional tax revenue on that $20 million. While not huge in the grand scheme of the federal budget, it's nothing to sneeze at either.

I pulled 500 out of my ass btw.

My question though is what happens with bank accounts and cheques. If I have $40.32 and withdraw it in cash do I get $40.30 or $40.35 ?

probably $40.30, since they'll require $.02 to think about it.

as an aside:
the loss of DB pensions along with prolonged very low interest rates is going to be a huge problem.
Lets say I earn 3%. Lets say that I want $50,000/year income to retire on (pre-tax) and am not worried about inflation. Lets also say that I can start saving at age 25 and will continue to do so until age 65 and will live for 25 years after that.
How much per month do I need to save?
Redo this question with 10% and 1%.
Note that during my working life, the current rate of inflation will cut my buying power by 2/3rds easily... between when I retire and when I day it will be cut in half again (roughly) so once you factor inflation into account I actually need it to be almost double that.

The problem is people don't look at retirement in those terms.
A house is not a retirement plan.

@dibs: the bank will charge a withdrawal fee no doubt:P

*Reads martian's post*

*Does some math*

*Hugs his defined pension plan*

A house is not a retirement plan... but your parents' house is :p

-Fooglmog
Guy with no clue.

What you outline has no impact on the incentives I outline foog. Regardless of group purchasing vs individual item purchasing etc. (However: the majority of sales tax revenues are obtained from single item transactions. This is because the largest contributors to sales tax revenue are not all the small purchases occurring mostly due to the majority of small item purchases being 0 rated or exempt items, they are the less frequent large ones. For example the single largest contributor to the GST/HST revenue base is the sale of new homes... aka a single, very large item transaction. These distorted incentives still very much exist here in the simplest form I outlined).

Of course the size of the transaction doesn't impact the degree of the loss because either way you are only gaining or losing a couple cents per transaction regardless of the cost, and in such cases the overall effect of the rounding is marginal. However the incentive however small it may be is still there.

Secondly, many small price items are purchased in bulk and it is easy to distort the price outcome when the final price is a simple multiple of the single unit price.

Thirdly, on a more general note the incentive is still there to adhere to the behavioral I suggest. It may be more complicated to implement in the case of multi item purchases, but business will still have a strong incentive to attempt to do so wherever and however possible.

I don't know why you would say that. There are tons of people over 50 still working in factories out there. There are plenty that work in factories right up until 65, and a decent number work beyond 65.

For example both of my parents are over 50 and both still work (one in a factory one in a hospital) My grandmother still works full time in a factory and she is in her 70's. My mom has a LOT of sibling and all of them are still working full time, most of them in factories.

My parents friends are all still working manual labour jobs. Most of my friends from back home's parents are still working manual labour jobs.

And then when you consider all the jobs out there that are less physically intensive than factory work... The fact is the vast majority of people who retire in their 50's are people in the military and white collar people who can actually afford to.

@H4: except when those factories close or downsize (unless you are in the 10% or so of the private sector that still has some kind of union job and even then).

It has nothing to with being mentally/physically able to do the job. It has everything to do with employers laying you off because someone younger is cheaper. The largest employers in Canada (financial institutions and telecom) all do this. What you are quoting me is a vast exception rather than a rule.

If I add finance + Telecom + service industry together for jobs it far and away dwarfs your factory job example... Also if you get laid off when you are 40-50 you aren't gonna get one of those factory jobs. Chances are, all you are going to get is a minimum wage job at walmart unless you are extremely lucky. The statistics on this don't lie.

And I'm not talking about retiring, I'm talking about being forced onto lower wage jobs/welfare/EI.

Couple of quotes for you:

1
"
"OAS shifts more social assistance burden to the provinces".
The end result of course is we see provinces tax increases."

2
"I watched Evan Solomon from CBC interview Flaherty after the budget and Solomon made the point that OAS/GIS is there to help the poorest of seniors and in fact some of them may have health issues that prevent them from working. Flaherty's response: 'There's welfare for that'.
I have never heard a more callous, disgusting, arrogant statement out of a politician's mouth."

Foogl: People who are lucky enough to inherit wealth don't count :P

Companies can't lay off older workers and replace them with younger workers Martian, that is illegal, you know that :P

There are also labour laws (beyond what is negotiated in collective barganing) that prevent such behaviour. For example by law, if a company has laid off employees within the last 2 years, they MUST call that person back to work before they are eligible to hire a new employee.

Also statistics are not on your side.

The labour force participation rate and the unemployment rate in Canada for working age individuals (aged 14 - 65) is approximately 70% and 7.4% respectively. The unemployment/lack of labour force participation are negatively skewed on the age distribution (those experience the greatest unemployment and labour force participation issues are under the age of 25).

According to latest statistics those aged 45 - 64 have the HIGHEST rate of labour force participation.

Statistics can be found here:
http://www.ccsd.ca/...ur_market/rates/index.htm

Also I don't know how common you believe factory closure to be, but it actually isn't all that common, at all.

Sure you hear about factories closing SEMI-regularly, but as a percentage of the total number of facilities in the province (speaking just of Ontario) it is very low.

here they want ppls to work longer aka extend time at work and partially what you said.

@H4: I love that line. They do it by removing positions and then creating new ones with a different title or they find reasons to lay the individual off. Having been involved with such planning I can tell you that it's perfectly legal and effective in terms of cost control.
The labour act is not as protective as you might think.


It's perfectly legal and common place.

@H4: I don't see how that total is possible.
Look at the provincial breakdowns. In *EVERY* single province the 45-65 group has a LOWER participation rate than the 25-45 group. So how is it when you roll it up it's magically higher?
Also the descrepancy is signficant.
On top of that it doesn't do salary breakdown by age group or average hours worked (part time vs full time).

On top of that
do get a better idea you would need participation rates by age (non-grouped) from 50-65 to see if there is difference end to end.

in ontario there is a 12 point drop between 25-45 and 45-65 btw..

keep trying though:)

I see what you are saying about the provincial vs country breakout, I didn't' look at the provincial breakouts, but I see that it doesn't make sense that it can be lower in every province but then magically higher nation wide.

You are arguing something different here though. The labour force participation rate is only relevant for the purpose of this discussion when considering the unemployment rate along with it.

For example the labour force participation rate is OBVIOUSLY going to be lower for older people, because of the fact that people retire early, and the proportion of people retired will increase with age thus decreasing labour force participation.

If you look at those figures in conjunction with the unemployment rate for each demographic, that paints the better overall picture. The higher age demographic's unemployment rates are much better than youth unemployment rates.

As for your example for hiring practices at your firm, I could argue that is the exception not the rule just as you have with my factory workers example. People like you and me work in professional services, but the vast majority of the population does not. Simply change the title of the job isn't sufficent to get around labour laws when it comes to recalling hired workers, the nature of the duties have to be "substantially different". I've heard of cases of firms being burned by this, and if your firm isn't doing it this way then your firm is breaking the law :P

One of the biggest reasons people argue for the prevalence of the youth unemployment figures is due to an overarching preference FOR older workers, because they have more on the job experience.
We are at a point now where older people with years of experience are grabbing up entry level positions and leaving inexperienced youth workers wanting.

@H4: the thing is that you are taking a leap of faith from the data that is available to a conclusion.
You are telling me that 10% - 15 % of the population retires voluntarily/willingly before age 65 in many provinces? In that case there is even less reason to raise the OAS age to 67.

Unemployment rate is very misleading because it only shows people looking for work. You are missing quality/quantity of work and wages earned.

Regarding the age thing, it extends to pretty much any non-unionized environment. No union = no seniority. Also I'm not really referring to my current employer but my prior employer as well as peoples experiences in a large array of industries.. If it's not a professional job it's worse. Professional job = I have more options/recourse.

I don't see how I am taking a leap of faith, I said the participation figures need to be looked at in conjunction with unemployment figures. Also no, I'm not saying it is necessarily 10-15%, I'm merely saying that early retirement accounts for at least SOME of that difference, possibly all, but exactly how much would require further research to determine.

"Unemployment rate is very misleading because it only shows people looking for work. You are missing quality/quantity of work and wages earned."

Agreed, which is why I said the unemployment and participation rate figures need to be viewed in conjunction...

I don't see how the fact that some people retiring early reduces the need to increase the OAS eligibility age. That would only be a factor if we see an INCREMENTAL INCREASE in the percentage of people choosing to retire early, compared to years past.