Yes...but!

September 8 2008

Home > Columns >Yes...But! Year 8-44

Just for curiosity’s sake I went back to my Canada Pension Plan records, right from its start in 1966 and did some calculations. I discovered that a lot of us benefit mightily from the public purse, me included.

I have always been self-employed, thus was responsible for both parts, which, initially, was 2 x $79.20 or $158.40, while my final contribution was $1,505, the year I turned 65. In those 27 years I paid a total of $15,600.

To be fair I added 8 percent compound each year, so that my first payment of $158.40 grew to $1,265.40 in 27 years. I did that for each year, adding another $17,900, increasing my pension pot to $33,500.

My initial CPP payment was close to $700.00 – it is now about $900.00 – which means that in 4 years I drew out 48 x $700 = $33,600, which means that for the last 10 years I have been living on welfare, received $100,000.00 more than I contributed. True, I have paid income tax on that amount, but that does not nearly cover my CPP plus the $500 I receive each month from the Old Age Security.

Will our children and grandchildren benefit so liberally as well? I doubt it: with resource depletion and the increasing uncertainty caused by climate change, the economic future does not look promising. Although the CPP is well funded, many defined payment pension plans – those who guarantee a fixed amount - are in deep trouble, due to longer lives, reduced interest and lower stock markets. Teachers and other civil servants beware!

What applies to disappearing benefits, applies to energy as well. We now see a temporary weakening in oil prices, from a high of about $145 to around $105 today, due to a fall in US consumption of 800,000 barrels per day during the first half of this year, the largest drop in 26 years.

Still I believe that the overall trend is up: since 2002 the price of oil has increased by 30% a year, despite temporary downturns. If the same pace continues, oil prices would reach $200 by end 2010, which will, of course, play havoc with the economy. Harper knows this, that’s why he has called an election now rather than wait until October 2009, the date he himself fixed by law.

Here is another challenge for the next generation: not only will they have no handsome handouts anymore, Homo Petroleus will be extinct within a few decades. The children today will end their lives without the abundant cheap energy supply that we, their parents and grandparents, enjoyed. In energy terms, current oil production is giving us 22 billion slaves working around the clock. These obliging servants are now dying off in droves and unless we learn to live within the limits set by nature, we will not be ready when these billions have burned themselves out in our service.

It is obvious to me that any intelligent government must look ahead, must recognize depletion and take measures to avoid societal collapse. I believe that Stephane Dion tries to do this while Stephen Harper is ridiculing this scenario.

So what should be done? The very first step is to properly inform the public of the situation so that they will support rather than oppose the necessary measures. The coming election is a good start. If a carbon tax reduces oil use, then it is a good first step: the polluter should no longer have a free ride as has been the case so far in our economy.

The past month has seen the reduction of oil use through pricing. The more it costs to fill-up, the less people drive. I have also noticed that people drive slower, which gives better mileage.

Thrift must become an ingrained habit. We must become old-fashioned again and save for the rainy day, and also prepare for a time when fuel availability is drastically reduced.

It may be too much to expect profound intelligence from politicians, but with school boards it is their stock in trade. They must create policies where there’d be no bus pick-up under 2 km from school, while planning communal bus pick-up points with a 2 km radius everywhere. We all know that walking is the best exercise, that buses cause green house gases, and cost a lot of money.

Today the real intelligent thing to do is to re-introduce the concept of one-room schools, exploiting computer use to the full. Now is the time to start pilot projects in such remote places as Marlbank and Queensborough.

The intelligent thing to do for governments is make all roads, including highways, biker-friendly, while reducing speed limits to 80 km, as has already been done in Spain.

We are approaching different times. The future belongs to those who prepare for it.