I wouldn't say that it's an arbitrary number, but it is a number that is fairly well grounded in the financial industry. That's your pension amount if you have a full 35-year pension. If you have a pension, you're likely going to have 70% of your retirement income, so that's pretty much where it comes from.
Can people live on less than 70%? A lot of Canadians are doing that already. It's not a hard and fast rule; it's just a general guideline.