In the short term, that might help some workers some of the time, but it doesn't fundamentally deal with the question that defined benefit arrangements, especially in the private sector, are incomplete contracts even today. So you always have this property rights problem.
The only way to deal with the property rights problem--and this may not totally suit you--is to have individual pension accounts that are owned by workers themselves. At least then you would have clear property rights. That's why I believe that in the private sector the move is inevitably toward individual pension accounts.
I do agree that increasing the Canada Pension Plan and the Quebec Pension Plan is a reasonable and attractive alternative in a number of ways. But I read somewhere that politics is the art of the possible, and the reality is that there is a very significant constituency in Canada of small employers who would be forced to increase their labour costs, and you just cannot ignore that issue. So when you advocate a mandatory increase, you can't just talk about the workers; you have to talk about the total system, and the reality is that you're going to have considerable resistance to that approach.
I've been scratching my head and thinking about what an alternative might be that would get greater buy-in, that would still meet some of the needs of coverage and property rights but also get larger buy-in from a larger group of people.
There is now a new branch of economics called behavioural economics. It has taught us that even though economic theory assumes people are rational and do rational things all the time, the reality is they don't. So how do we design retirement income systems that take that reality into account?
You mentioned earlier the notion of voluntary. I agree you could create the best voluntary system in the world and you would get relatively low take-up. But we've learned that the notion of automatic enrollment in a well-designed system... But let's say every non-covered worker in Canada who doesn't have a pension plan gets a letter on January 1 of some future year. It says, “Congratulations, as of January 1 you are now a member of...” In my C.D. Howe paper, I call it the Canada supplementary pension plan. “You don't have to make a lot of choices. This will be your contribution rate. This is the target pension it should produce under reasonable assumptions. This is what your investment program will look like as you age over time, unless you intervene.”
That kind of design is tremendously attractive, in the sense that if people trust the system, a lot of them will go along and say thank you very much that you did this for me.