Provinces accuse Ottawa of hampering CPP
Flaherty says federal government won’t make any commitments ‘far down the road’
MEECH LAKE — Ontario, Quebec and other provinces are accusing the federal government of unilateral action and stall tactics to block an enrichment of the Canada Pension Plan that would help Canadians save more for their retirement.
Ontario’s finance minister says the federal Conservative government’s decision to delay CPP enhancements will force the province to go it alone with a “made-in-Ontario” solution for boosting retirement incomes, a model at least one other province said could be potentially adopted by other jurisdictions in Canada.
After federal and provincial finance ministers completed a full day of meetings at scenic Meech Lake, a handful of furious ministers said the federal Conservative government is effectively blocking further discussions on boosting CPP. Ottawa is punting the issue down the road, they said, when all of the provinces agreed it’s worth examining as one of the tools for increasing retirement income for Canadians.
“I’m very disappointed that they used stall tactics in order to ensure that CPP enhancement wasn’t even considered at this point in time. We need leadership right now. We need vision and we need to ensure that Canadians all across Canada are protected,” a livid Ontario Finance Minister Charles Sousa told reporters at the closing news conference.
“They (federal government) even had the audacity to suggest there was no consensus in the room. That’s not true. There was. The only one that was not in favour was the federal government, and that’s unfortunate.”
Sousa said provinces weren’t proposing to enrich CPP today, but to continue the discussion on establishing a framework and triggers for when the enhancement could kick in down the road to help middleclass Canadians who aren’t saving enough for retirement.
A number of ministers said provinces agreed that moving toward an enriched CPP is just one of the pillars needed for Canadians to save more money in the future, along with other options such as pooled registered pension plans, but that Ottawa balked at CPP enhancement anytime in the near future.
“This is a very short-sighted view that I see happening right now. In fact, what they’re proposing to do is kick the can down the road for another economic cycle to take place, and all we’re going to do is get back to where we are now,” Sousa added.
He said his province is left with little option but to proceed with a “made-in-Ontario” solution for helping its citizens save more for retirement, but provided few details about what that might entail.
Quebec’s Nicolas Marceau echoed Sousa’s concerns, saying his understanding is Ottawa is the only government blocking further study about how and when to enrich CPP in the future.
“In my view, a vast majority of provinces are in favour of an enhancement of CPP or (Quebec Pension Plan), all the provinces were in favour of further work,” Marceau said. “But despite the fact that there was a unanimity … the federal government decided that they wanted to stop future work.”
Federal Finance Minister Jim Flaherty and junior finance minister Kevin Sorenson maintained there was no consensus in the room about how and when to proceed with boosting the CPP.
The federal government says now is not the time for CPP payroll tax increases that would take money out of the pockets of workers and force employers to cut jobs, hours and wages. But Ottawa is refusing to say when would be a good time to consider any potential CPP enhancement.
“One of the things that I don’t believe in is governments making commitments far down the road ... and that was the kind of proposal that was being brought forward. We’ll study it some more, we’ll look at triggers,” Flaherty told reporters.
B.C. Finance Minister Michael de Jong said the federal government provided “the majority of the hesitation” about proceeding with further work on establishing appropriate triggers for CPP enhancement.
One of the leading proposals for enriching CPP comes from P.E.I. Finance Minister Wes Sheridan, who wants to increase the maximum CPP contribution to $4,681.20 a year, from the current $2,356.20, starting in 2018. The maximum annual benefit would increase to $23,400 from the current $12,150.
“There is a consensus among the (provinces and territories). And today we witnessed something that really we didn’t expect to see,” Sheridan said, noting the provinces need to take 24 hours to decide how to react to Ottawa’s surprise move.
An enriched CPP would complement the new pooled registered pension plans — a private-sector pension option to boost retirement savings — that is endorsed by the Harper government.
It is estimated that more than half of Canadians do not have access to a workplace pension plan.