Ontario’s provincial budget last week contained encouraging news for women across the country. The government announced that it has finally agreed to a change in the Canada Pension Plan that will provide higher pensions for women who leave their jobs to raise children. Ontario had been the only province that opposed the measure, and, with the Queen’s Park veto withdrawn, federal officials said the new provision now can take effect as early as June. Roughly two million women will gain from the new program, including those mothers who completed their child-rearing years ago.
More encouraging news for women came from Ottawa last week when Status of Women Minister Judy Eróla hinted at a federal scheme to make affirmative action mandatory for firms under its jurisdiction—chartered banks, Crown corporations and railways. (Affirmative action, currently voluntary, means hiring and promoting women to balance the male-female ratio in the work force.) Eróla said that although her ministry’s plans, to be announced in a matter of months, would “not very likely” take the form of nationwide legislation, they would take a “very pragmatic approach.”
The so-called dropout provision will increase the average pension of women with children by 22 per cent, according to a 1979 study by the Economic Council of Canada. Currently, the CPP pays out pensions based on the contributor’s average earnings for all the contributory years between 18 and 65. The lowest 15 per cent of those earning periods (up to seven years) is dropped before calculating the average. Under the dropout pro-
Ontario’s budget has finally cleared the way for higher pensions for women who leave their jobs to raise children
vision, a woman can also delete her child-rearing years as well—in effect, raising her average contribution over the length of her working life. And that, in turn, will increase the pension she will receive at 65, along with any survivor or disability benefits also flowing from the CPP. The vast majority of beneficiaries of the dropout provision are women, but it applies to any parent who
drops out of the work force to raise a child—normally, to the parent who receives the family allowance cheque.
Women’s groups have been promoting the dropout clause for years, arguing that child-rearing is important work that should be acknowledged in the national pension plan. Parliament enacted the program in 1977, but the change needed the consent of twothirds of the provinces with two-thirds of the country’s population. (Quebec instituted its own pension scheme the same year.) By last year, when British Columbia endorsed the proposal, all provinces except Ontario had agreed— and Ontario held a veto.
Premier William Davis’ government had objected to the subsidy to women created by the dropout clause because it would provide them with more pension than they had earned through contributions. And Ontario maintained that the change should only be considered in conjunction with other changes needed in the CPP’s financing, including an increase in premiums. In the end, the Davis cabinet was influenced both by other governments and by pressure from within Ontario. The change of heart was signalled in last week’s Ontario budget. Now, only a provincial government order-in-council is needed to enable Ottawa to declare the 1977 act in effect. -JOHN HAY in Ottawa.
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