Refinancing the CPP: The Cost of Acquiescence

Canadian Public Policy

Refinancing the CPP: The Cost of AcquiescenceAuthor(s): Bruce KennedySource: Canadian Public Policy / Analyse de Politiques, Vol. 15, No. 1 (Mar., 1989), pp. 34-42Published by: University of Toronto Press on behalf of Canadian Public PolicyStable URL: http://www.jstor.org/stable/3551103 .

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Refinancing the CPP: The Cost of

Acquiescence

BRUCE KENNEDY* The Institute for Research on Public Policy

Dans cet article, nous examinons le rapport entre le Regime des Pensions du Canada et les provinces depuis les nouvelles dispositions financieres du RPC. Nous retragons brievement l'origine du RPC et celle de son proche parent, le Regime des Rentes du Qu6bec. Ensuite, nous passons en revue les dispositions financieres en vigueur de 1966 a 1986, de meme que les possibilitks de reforme examinees alors par le d6partement des Assurances. Cela nous permet de faire apparaitre les diff6rences dans les dispositions adoptees enjanvier 1987. Nous en concluons que le RPC est et continuera d'etre un programme congu pour repondre a deux objectifs fort distincts: le d6boursement de rentes et l'augmentation des revenus pour les gouvernements provinciaux. On estime plus precis6ment que les transfers r6els du RPC vers les provinces atteignent la somme d'environ 1,2 milliard $ par annee.

This article scrutinizes the relationship between the CPP and the provinces under the new CPP financial arrangements. It briefly recalls the genesis of the CPP and that of its close relative, the Quebec Pension Plan. The financial arrangements in effect from 1966 through 1986 are then reviewed along with some of the options for reform that were explored by the Department of Insurance. These are contrasted with the new financial arrangements put into effect in January 1987. The conclusion drawn from comparison of these arrangements is that the CPP is and will continue to be a program intended to serve two quite distinct purposes: paying pensions and raising revenue for provincial governments. Specifically, the effective transfer from the CPP to the provinces is estimated to be about $1.2 billion per year.

Introduction

The 'great pension debate' of the '70s and early '80s generated an extensive litera-

ture concerning such issues as whether the CPP is solvent, whether the CPP subsidizes the provinces, whether the program has a savings function on top of its social policy function, and how the CPP redistributes wealth both within and between genera- tions of Canadians.1 This literature is large- ly inconclusive due to the fact that from the mid 1960s through the mid-1980s the very nature of the CPP was enigmatic. Its long term financial characteristics had been left

undefined and subject to future negotiations. Now that these negotiations have been completed, and the CPP financial arrangements have been fully specified, it is time to reexamine several of the open issues. This article reexamines the relationship between the CPP and the provinces. It concludes that the CPP is essentially a typi- cal, unfunded, 'pay as you go' public pension plan, but one that has been burdened with a secondary role of generating revenue for the participating provinces.

While public pension plans are now a standard feature of developed industrial economies, Canada and Sweden are the

Canadian Public Policy - Analyse de Politiques, XV:1:34-42 1989 Printed in Canada/Imprim6 au Canada



only countries that have sizable funds associated with them (Myles, 1984:112-13). Public pension plans are generally unfunded or 'pay as you go' programs, the financial viability of which rests on the commitment of governments to tax future workers to pay future benefits. In the CPP debates of the 1960s business, labour, welfare organizations and all parties of the House of Commons were opposed to funding the CPP (Bryden, 1974:173). This posi- tion was due variously to a desire to minimize contribution rates, to maximize benefits, or to avoid the accumulation of substantial funds in government hands.

A CPP fund does exist nonetheless, and its creation may be attributed entirely to the capital requirements of the provinces, most particularly to those of Quebec. In 1964 the Pearson government needed full provincial co-operation to fulfill its aspira- tion to implement a national contributory public pension plan. Ottawa desired unifor- mity and portability within the public pension system, but as the provinces were constitutionally paramount in the field of old age pensions, a national program could be rendered locally inoperable by any province wishing to enact its own legisla- tion. Furthermore, the federal government wished to include survivor and disability benefits, and to do so required a constitu- tional amendment to extend federal com- petence to these areas.

Quebec was experiencing an upsurge of nationalism under the new Liberal leader Jean Lesage and the slogan of'maitres chez nous'. At the federal-provincial conference of 1964 Quebec unveiled its intentions for a Quebec Pension Plan. Among other dif- ferences, the Quebec plan proposed a much higher contribution rate than that of the federal plan (4% versus 2%). In conse- quence, unlike the federal proposal, the Quebec design would generate a substantial fund controlled by the provincial government. With this example, the poten- tial linkage between the income security of the elderly and the capital requirements of province building became evident to all

provinces, and the hope for provincial acquiescence to the federal plan vanished.

A compromise plan involving parallel CPP and QPP designs was quickly ham- mered out behind the scenes by officials from Ottawa and Quebec. The resulting 3.6 per cent contribution rate applying to both plans was a negotiated compromise rather than an actuarially designed parameter.

Implications of the 3.6 Per Cent Rate

The implications of the 3.6 per cent contribution rate are depicted in figure 1. The revenue raised through 'contributions' would be in excess of benefit requirements until the mid 1980s. It was clear from the outset, however, that maturation of the

$ billions 1n

40

20 -

10

n 1969 1974 1979 1984 1989 1994 1999 2003

Revenue from Interest

Revenue from contributions

r Expenditures

Figure 1 CPP revenues, expenditure and fund; under

original arrangements (reproduced from Dept. of Finance and Health and Welfare Canada, 1985:3)

plan (phasing in of full benefits) combined with the demographic aging of the population would eventually bankrupt the program if the contribution rate were left at 3.6 per cent.

For the short term the program was to be a major source of funds for the provinces. Contributions to the CPP go into the CPP account from which program benefits and expenses are paid. The surplus in the account is routinely lent to the participating provinces, and the accumulated debt of the provinces to the CPP account is called

Refinancing the CPP 35

CPP Fund 30 -



'the CPP investment fund'. Each province's share of the loans is determined by the portion of CPP contributions originat- ing in that province. The loans from the CPP account are secured by interest bear- ing notes issued by the provinces. However, so long as contribution revenues exceed program benefits and expenses (as was the case from 1966-1984), all payments of interest or repayments of principal by the prov- vinces simply add to the surplus in the CPP account and are consequently rolled over into new loans to the provinces.

The effective terms of the loans made to the provinces depend upon the long term financial arrangements for the CPP, particularly on the schedule of contribution rates. How the plan would be financed over the long term was not resolved in 1964. It was left to future resolution via an onerous amending formula requiring the consensus of the federal government and 'at least two- thirds of the provinces where the plan is in force, having at least two thirds of the aggregate population of those provinces'. This gave the federal government and Ontario veto power over any changes to the CPP. Furthermore, if portability were to be maintained with the QPP, then Quebec also had an effective veto over any changes to the financial arrangements.

The Fund B and Fund C Scenarios

For two decades the CPP remained in this ambiguous state with clearly transitory financial arrangements and no specific and viable long term plan. Many observers assumed that the province funding aspect of the CPP was temporary and that the plan would eventually be put on a 'pay as you go' basis. Some, however, correctly anticipated the difficulty of weaning the provinces from these revenues:

It can be claimed that its capital providing role is only a transitory one, that is, that it will dis- appear once the pace of benefits catches up with the pace of contributions. However, it is clear that the appetite of the provinces for capital

funds will not likely abate in the foreseeable future, and continued pressure will be exerted on the Plan for it to serve as a general fund raising mechanism over and above a pure social policy function. This pressure will only be alleviated if compensating adjustments are made elsewhere in the system of federal-provincial financial arrangements, for example, in the equalization formula and tax-sharing arrangements. (Col- lins, 1975:243.)

The official actuarial projections for the CPP are prepared by the (federal) Depart- ment of Insurance and are released through a series of actuarial reports that are required by statute. Since the long term financial arrangements for the CPP were unknown, the Department of Insurance adopted the practice of preparing actuarial projections for three different scenarios, each representing a possible resolution to the CPP financing dispute. Of these options, the ones associated with the 'Fund B' and 'Fund C' projections are of considerable interest.3

Fund B involved putting the CPP on a version of 'pay as you go' contribution rates in the mid-1980s as soon as total expenditures reached the level of contribution revenues. From then on revenue from contributions would be kept equal to total expenditures. Prior to the transition point the net flow of funds would consistently be from the CPP account to the provinces. After the transition the CPP would continue using its contribution revenues only, and the 'CPP Investment Fund' would increase in perpetuity as its interest payments were rolled over in perpetuity. This option was not favoured by the Department of Insurance because 'it might not be easy to explain the significance of an ever in- creasing fund which had no effect on the rates of contribution' (Dept. of Insurance, 1974:7). In other words, the 'loans' to the provinces would be clearly revealed as cash transfers not subject to interest or repay- ment.

The Fund C scenario involved shifting to a different 'pay as you go' basis in the mid-

36 Bruce Kennedy



1990s at the point where contributions plus interest on the fund equal total expenditures. In this case contribution revenue would be managed so that total plan revenues (including fund interest) would always equal total expenditures. By this scenario, starting in the mid-1980s, the provincial interest payments would cease being rolled entirely over into new loans, and the net flow of funds would reverse to flow toward the CPP account. Starting in the mid-1990s, all interest revenue would be required for CPP expenditures and no new loans would be made to the provinces. The fund would then stabilize at about $47 billion. Thus the loans to the provinces would never be repaid, but full interest would be paid in perpetuity. This Fund C scenario was never implemented, although it was treated as the likely outcome of the inevitable negotiations. In Canada Pension Plan Statutory Actuarial Report No. 10 (Department of Insurance, 1986) the Fund C scenario was treated as the status quo and referred to as 'the existing plan'.

During 1986 the federal government conducted a public relations campaign an- nouncing that it had successfully negotiated changes to the Canada Pension Plan that would ensure the financial health of the Plan. A new schedule of contribution rates was adopted (as outlined in Actuarial Report No. 10, Department of Insurance, 1986) and the first contribution rate increase went into effect in January of 1987. The plan that was adopted lies somewhere between the Fund B ('loans' equals transfers) scenario, and the Fund C (full interest paid at the nominal rates) scenario. It is depicted in figure 2. Note that under the new arrangements contribution revenue is maintained well above the 'total revenue =

expenditures' level dictated by the Fund C strategy, though slightly below the 'contributions = expenditures' level dictated by the Fund B strategy.

As contribution revenues are allowed to fall somewhat below the level of expenditures, interest payments are not entirely rolled over under the new arrangements

$ billions

1990 1995 2000 2005 2010 2015 2020 2025

- Interest

J- (Contribution

1% Expenditures

Figure 2 CPP revenues, expenditure and fund; under the new financial arrangements (prepared from projection in CPP Statutory Actuarial Report #10, p.9)

and there is (over the period shown in figure 2) a net flow of funds from the provinces to the CPP account. However, it is surprising to note that even around the year 2025, when the retirement of the baby boom generation will be causing a 'rentenberg' crisis4 and CPP contribution rates are projected to be over 11 per cent, the plan embodied in the new CPP financial arrangements is to continue making sizable new loans to the provinces out of CPP revenues. (In figure 2 new loans to the provinces are indicated by the excess of total revenues over total expenditures.) As the practice of partially rolling over provincial interest payments into new loans con- tinues, the size of the CPP investment fund (the accumulated provincial debt to the CPP) will continue to grow for the foreseeable future. It is projected that the accumulated total of new loans made to the provinces over the next century will be over 300 billion current dollars (Dept. of In- surance 1986:9 fund projection discounted at 3.5 per cent as per the inflation assump- tion used in the projection).

Size of the Subsidy

As the CPP subsidization of the provinces




arises not through low nominal interest rates, but through the rolling over in vir- tual perpetuity of some portion of interest payments, it is not easy to assess the mag- nitude of the subsidy. The approach used here is to focus on the projected net flows between the provinces and the CPP which are seen as the effective return on the existing provincial debt to the CPP account. In 1986 the debt of the provinces to the CPP stood at $33.8 billion. Net flows to the CPP account from 1987 through 2100 have been projected for both the new financial arrangements and for the Fund C option. The Fund C option serves as a good benchmark because it is clear that it involves full payment of interest by the provinces at the nominal rates but no repayments of principal. The projected Fund C cash flows represent a return of 9.55 per cent per annum on the accumulated advances to the provinces up to 1986. The projected cash flows for the new CPP represent a rate of return of 6.09 per cent on the same initial investment.5 To annualize the subsidy, the dif- ference between these two rates of return on $33.8 billion is $1.2 billion per year.

The above computation ignores the value of the large fund or outstanding debt that will exist in 2100 under the new CPP but not under Fund C. Presumably that fund will represent a commitment to some schedule of cash flows from the provinces to the CPP over the 22nd century. Those flows are too remote and too hypothetical, however, to have much impact on the calculated rate of return. The estimate above is not very sensitive to the inclusion of reasonable speculations as to post 21st century net cash flows. It should be recognized that even the 21st century schedule of cash flows is speculative beyond the normal reservations of actuarial forecasting. In- deed if the CPP still exists in 2100, it will be a program of extraordinary longevity.

Considerable uncertainty remains concerning what rate of return will be realized on the CPP investment fund. The new contribution rate schedule is to be reviewed every five years to assure an 'appropriate'

level of funding, and may again be changed in the event of federal-provincial agreement on the changes. One might speculate that any such changes are likely to be in favour of the provinces, since the future emergence of an acquiescent coalition of premiers seems less likely than the emergence of a single acquiescent Prime Mini- ster. Looking back from the year 2100, the CPP's subsidy to the provinces may well look much larger than the above figures suggest.

Objections to the Province-Funding Role of the CPP

Does it matter that a provincial revenue raising role has been built into the CPP? Two objections could be made to this practice, the first of which concerns equity. The CPP payroll tax is a rather regressive source of revenues. Contributions are effectively proportional to earned income up to about the average industrial wage, con- stant beyond that point, and are tax deduct- ible.6 Whether or not one considers funding provinces from this revenue source as regressive should depend on what one en- visions as the alternative. If it is assumed that the burden would otherwise fall on sales taxes, for example, then there may be little or no concern raised on the grounds of equity. If it is assumed that the revenue could be made up through federal-provincial fiscal transfers or the personal income tax, then the practice of using the CPP to fund provinces would appear to put a heavy burden on lower income, working Cana- dians.

The other objection that could be raised against the practice concerns integrity. It is common in developed capitalist democracies to 'earmark' social security taxes by segregating them from general revenue, labelling them and directing them to special accounts. The original intent of this practice was to educate the public as to the cost of social security benefits, and thereby to dampen demand for increases in benefits. Unfortunately, there is now a ten-

38 Bruce Kennedy



dency for governments to 'over earmark' or to conceal taxes for other purposes in desig- nated social security taxes. The CPP and QPP are not the only Canadian cases in point. Bryden (1974:154) suggests that some taxes introduced in association with Old Age Security (OAS) were similarly surplus to pension requirements. Canada's Unemployment Insurance program could also be characterized as a social security program playing host to a regional equalization program. These practices compromise social policy objectives and are calculated to deceive rather than educate the public. It is interesting that one never sees taxes required to pay social security misrepresented as taxes required for deficit reduction, provincial equalization, or sub- marines. One might infer that governments perceive taxes raised for social policy purposes to be more acceptable to the public than taxes for many other purposes.

It is clear that provincial governments have done well to have recently per- petuated a revenue source that many observers believed would be temporary. Strategically they may have done even bet- ter. It should be recognized that Ottawa wielded the hammer - this time only - in the CPP refinancing negotiations. The federal government had a veto over any changes to the 1966 arrangements, and, if no agreement were reached, it was the provinces that would increasingly have borne the burden of CPP financing. In 1986 the federal government claimed a victory for having finally resolved the ambiguity in CPP financing and put the plan on a firm financial footing. They also gave up the hammer and have little to show for it. If they now wish to proceed with CPP expan- sions, such as 'homemaker pensions,' they may lack the means to convince the provinces to 'opt in'. The new CPP financial arrangements should be counted (along with Meech Lake) in the total cost to Ottawa of the current era of federal-provincial har- mony.

The Role of the Fund

It was demonstrated above that the fund serves a fiscal transfer function in that the CPP transfers to the provinces are achieved through the management of the fund. As is suggested in the earlier quotation of Col- lins, however, this transfer could be a- chieved more simply through appropriate adjustment of the existing federal-provincial fiscal transfer arrangements. The fund provides a shroud for these transfers, but 'stealth' is not in itself an adequate ra- tionalization for perpetuation of the fund.

In documents for public consumption, the federal government presents the CPP fund as a contingency fund related some- how to the security of the CPP (see for example Dept. of Finance and Health and Welfare Canada, 1985:11-12). It is, however, difficult to imagine that in the event of some unforeseen collapse of the earnings base the provinces would be standing by willing to accelerate their payments to the CPP fund. Indeed, both the Department of Insurance and the CPP Advisory Commit- tee have long recognized that the CPP fund itself is of little significance to the CPP's public pension role.

Achieving security through funding does not seem possible in social insurance, because a country cannot divest itself of its pension obliga- tions, unless it were to export the required savings and this did not itself constitute a reduction in security. (Department of Insurance, 1986:73.)

In its original conception, the Canada Pension Plan was shifted from a pay-as-you-go approach to a partial funding approach without any clear definition of the meaning of 'partial'. In the years since the establishment of the plan the partial fund has become very important to provincial finances. However, the fund does not provide any measurable degree of security for the participants beyond what would exist if the plan were on a strict pay-as-you-go basis. The implicit meaning of partial funding has been based more on provincial financial needs than




on the needs of the plan. (CPP Advisory Com- mittee, 1976:22.)

The massive assets and liabilities that make up the CPP investment fund could easily be eliminated through the CPP amendment provisions by any coalition of the federal government and at least two thirds of the participating provinces, having at least two thirds of the aggregate population of those provinces. The sub- sidies to the provinces could indeed be replaced by fiscal transfers (which would reduce the tax burden on the working poor), and the pension plan would suffer no ill effects.7 We are not likely to see such a simplification and clarification of the CPP funding arrangements, however, because the CPP fund is metaphorically very important.

The major role of the CPP fund seems to be that it supports the savings imagery that surrounds the CPP.8 The savings metaphor rationalizes the practice of relating pension payments to the amount of taxes paid, or effectively, that of paying less to the less af- fluent. If the fund were eliminated, it would be much clearer that the CPP is simply an- other transfer program, not unlike Old Age Security (OAS) or the Guaranteed Income Supplement (GIS). People would be more inclined to question why the CPP tax is so regressive; why indeed a separate CPP tax is even necessary; why 'homemakers' cannot be paid public pension benefits; and why the largest CPP benefits go to those who fared well in the labour market during their working lives. The CPP was introduced in large part to de-emphasize the OAS program (which was seen as too egalitarian) and to channel benefits further up the income spectrum than does OAS. Ironically, the savings metaphor has worked so well that many Canadians who support the CPP are critical of the much more progressive OAS program for being insufficiently 'targeted'.

Public pensions plans have effectively socialized an ancient system of within fami- ly, inter-generational support. Whether or

not they personally have raised any descen- dants, all Canadians now enjoy a claim on the earnings of the next generation.9 The notion that we each fund our future pensions through our own contributions is simply a convenient myth, one that is difficult to sustain without a fund.

Conclusion

The introduction identified a number of issues that should be reexamined now that the veil of ambiguity has been lifted from CPP financing. This article has dealt ex- clusively with the financial relationship between the CPP and the participating provinces. An understanding of this relationship is, however, a prerequisite to in- vestigation of other issues such as the inter- cohort and intra-cohort transfers generated by the plan. This paper has argued that the CPP is essentially a pay as you go type plan that is burdened with a provincial revenue raising function executed through the management of the CPP fund. For many analytical purposes the CPP may be modelled as an unfunded, pay as you go type plan provided that allowance is made for some leakage of funds from the plan to the participating provinces. This implies, for example, that the rate of return on contributions received by future cohorts of participants will be governed by Aaron's 'social insurance paradox' (Aaron, 1966) less some allowance for the payment of transfers to the provinces (and operating costs) out of CPP contributions.10

The model proposed here for the CPP ap- plies equally well to the Quebec Pension Plan. The relevant parameters of the two plans are the same. The QPP pays out the same benefits, and taxes according to the same schedule of contribution rates. As demonstrated above, these rates are higher than what is required to fund the plan on a pay as you go basis. The differen- ces between the QPP and the CPP lie in the provincial purposes to which the surplus contributions generated by the two plans have been put. QPP surpluses have been

40 Bruce Kennedy



used to acquire provincial equity in strategic industries. This equity, however, is of little significance to QPP participants. Quebec has shown no inclination to liqui- date these assets in order to prevent the drastic payroll tax increases foreseen for early in the next century. Quebeckers will receive the same rate of return on their public pension 'contributions' as do other Canadians, and a portion of their contributions is being effectively diverted from pensions to provincial purposes. The QPP simply involves a different set of provincial purposes.

Inter-government finance, of course, has long been central to any federal-provincial discussion of the CPP/QPP, and has some- times eclipsed considerations of social policy in these discussions (Simeon, 1972:152). Only since 1986, however, has it been possible to verify and quantify the CPP's provincial revenue generating role, and the degree of federal subsidy of provincial financing inherent in the higher than necessary CPP contribution rates.

Notes

* This article has been circulated as a working paper of The Institute for Research on Public Policy. I am grateful for helpful comments from A.R. Dobell, M.J. Prince, T.K Shoyama, M.C. Wolfson and Tom Kent.

1 Ethier (1985) provides a good introduction to this literature.

2 An account of these negotiations is given in Kent (1988:281-2).

3 Fund A referred to the unlikely scenario depicted in figure 1. The contribution rate would be held at 3.6% until all loans to the provinces had been repaid.

4 'Rentenberg' (German: pension mountain) refers to the phenomenon of rising pension costs associated with population aging and, in particular, with the retirement of the baby boom generation.

5 Based on projections from Dept. of Insurance (1986:9). Beyond the year 2012 annual cash flows were interpolated where necessary.

6 As a concession to the poor there is a small earnings exemption (the Year's Basic Exemption, YBE) but as 'contributions' are deducted at source and refunds are available only on the employee's share of contributions and only on application, the YBE is of little actual benefit to the working poor.

(See Dept. of Insurance, 1986:50.) 7 Eliminating the CPP fund would, however, have

a profound impact on government accounts. The net federal debt (liabilities-assets) would increase by 19%. The total liabilities of the provinces would suddenly be less than their aggregated assets. This provincial wealth, however, would be con- centrated in the west, with only Alberta, BC and Saskatchewan having, individually, assets in excess of their liabilities. (Based on March 31, 1986 balance sheets provided in Provincial Government Finance, Statistics Canada cat. 68-209, 1985/86, table 1, p.34 and Federal Government Finance 1985, Statistics Canada cat. 68-211, table 9, p.46)

8 Asimakopulos (1984) demonstrates that the savings role of the CPP is fictitious.

9 From this perspective, public pensions benefit the childless at the expense of those who raise children. Public pensions are common in in- dustrialized societies, and they probably con- tribute to the low fertility that typically exists in those societies.

10 This relationship implies that the (steady state growth/stable contribution rate) average rate of return on contributions (effectively the long-term average rate of return) is limited by the rate of growth of the earnings base, i.e., by (approximate- ly) the sum of the rate of growth in mean real earnings and the rate of growth of the working population.

References

Aaron, Henry (1966) 'The Social Insurance Paradox,' Canadian Journal of Economics and Political Science, 32:371-4.

Asimakopulos, A. (1984) 'Financing Canada's Public Pensions - Who Pays?' Canadian Public Policy - Analyse de Politiques, X:2: 156-66.

Bryden, Kenneth (1974) Old Age Pensions and Policy-Making in Canada (Montreal: The In- stitute of Public Administration of Canada and McGill-Queens University Press)

CPP Advisory Committee (1976) 'A Report to the Honourable Marc Lalonde Minister of National Health and Welfare on The Fund- ing Principles of the Canada Pension Plan,' May 1976, Ottawa.

Collins, Kevin (1975) 'The Canada Pension Plan as a Source of Provincial Capital Funds.' Pp. 243-61 in How Much Choice: Retirement Policies in Canada (Ottawa: The Canadian Council on Social Development).

Department of Finance and Health and Welfare Canada (1985) The Canada Pension Plan: Keeping it Financially Healthy (Ottawa:




Supply and Services Canada). Department of Insurance (1974) Canada Pen-

sion Plan Statutory Actuarial Report, at December 31 1973 (Ottawa: Supply and Ser- vices).

-- (1986) Canada Pension Plan Statutory Ac- tuarial Report #10 as at Dec. 31 1985 (Ot- tawa: Supply and Services).

Ethier, Mireille (1985) 'Survey of Pension Is- sues.' In Frangois Vaillancourt, research coordinator, Income Distribution and Economic Security in Canada (Toronto: University of Toronto Press in cooperation with the Royal Commission on the Economic Union and Development Prospects for

Canada). Kent, Tom (1988) A Public Purpose (Kingston

and Montreal: McGill-Queen's University Press).

Myles, John (1984) Old Age in the Welfare State: The Political Economy of Public Pensions (Toronto: Little, Brown & Co.).

Parliamentary Task Force on Pension Reform (1983) Report of the Parliamentary Task Force on Pension Reform (Ottawa: Queen's Printer).

Simeon, Richard (1972) Federal Provincial Diplomacy: The Making of Policy in Canada (Toronto: University of Toronto Press).

UNIVERSITY OF GUELPH

GRADUATE STUDIES IN ECONOMICS

The Department of Economics offers a graduate program leading to the M.A. degree. Admission requirements include at least a second class standing in an honours program in economics or equivalent. Some applicants may be eligible for a qualifying semester. Admis- sion is possible in September or January. Qualifying students can be admitted in May or September. Funding is available to qualified students. For more information, contact Graduate Co-ordinator, Department of Economics, University of Guelph, Guelph, Ontario N1G 2W1, (519) 824-4120 ext. 2187.

42 Bruce Kennedy

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Refinancing the CPP: The Cost of Acquiescence

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