‘Not the time’ to boost CPP
Some provinces urging Flaherty to hike contributions
OTTAWA — Finance Minister Jim Flaherty says now is not the time to enrich the Canada Pension Plan and that he wants consensus from all provinces before boosting it.
But many of his provincial counterparts are urging him to modestly increase CPP even if there’s no unanimity.
Increasing CPP contributions for Canadians, renewing the federal equalization program, skills training and the possibility of a national securities regulator are some of the main issues on the agenda when Flaherty meets provincial and territorial finance ministers Sunday and Monday in and around Ottawa.
Flaherty is expected to deliver a presentation or make an announcement on possible equalization changes, albeit potentially minor tinkering, according to at least one finance minister.
The ministers are scheduled to hold a working dinner Sunday night in Ottawa before a full day of meetings Monday in Meech Lake, just across the border in Quebec.
A number of provinces are urging the federal govern- ment to modestly and gradually increase CPP contributions in the coming years to help Canadians better save for retirement. An enriched CPP would complement the new Pooled Registered Pension Plans — a private-sector pension option to boost retirement savings — that is endorsed by Ottawa.
Flaherty said Friday the federal government is concerned about increasing CPP contributions at the current time because it would slap an additional financial burden on employers during fragile economic times, potentially threatening their ability to hire workers.
The federal government can’t unilaterally change the CPP; amending it requires the backing of two-thirds of the provinces representing two-thirds of the population.
“This is not the time to put another burden on employers and dampen employment prospects for Canadians. That’s my view. Not everyone agrees with that view,” Flaherty told reporters Friday.
“We’ll see collegially whether there’s a consensus or not. I would not want to move ahead ... without everyone being on board. It’s quite important in the federation that if we’re going to do something fundamental with respect to the Canada Pension Plan, we really try to do it altogether.”
It is estimated six in 10 Canadian workers in the private sector have no private pension plan, while about only one-third of Canadians make contributions to registered retirement savings plans.
A number of provincial governments believe modestly enriching CPP is necessary if Canadians are to have a comfortable nest egg for retirement.
Quebec and Alberta — with about 34 per cent of Canada’s 35 million people, and just large enough to block CPP changes — have previously opposed enriching the CPP and focused on PRPPs. Quebec has the Quebec Pension Plan, similar to the CPP.
The new Parti Québécois government said in its recent budget that it’s willing to work with other provinces and Ottawa to “assess the possibility” of gradually boosting the QPP and CPP.
Ontario won’t support PRPPs unless the CPP is enhanced. Manitoba says the federal government should boost the CPP if there’s twothirds support, even if all provinces and territories aren’t necessarily onside.
“I don’t think a pension approach can be comprehensive without a modest increase to the Canada Pension Plan,” Manitoba Finance Minister Stan Struthers said in an interview. “If we have an agreement on some of the options and two-thirds are on board, I think we should move ahead.”
Flaherty acknowledged that gradually phasing in increases in CPP contributions is one option and “a reasonable position to take.”