Provinces push to delay planned increase in CPP premiums

OTTAWA — Provincial finance chiefs have quietly prodded federal Finance Minister Chrystia Freeland to pause planned increases in the premiums workers and businesses pay into the Canada Pension Plan.

The planned increase on Jan. 1 is part of a multi-year plan approved by provinces and the federal government four years ago to boost retirement benefits through the public plan by increasing contributions over time.

The first premium bump was in 2019, another was earlier this year and the next is due at the beginning of 2021.

A number of provincial finance ministers on a recent call with Freeland asked her to delay next year’s automatic increase because of the COVID-19 pandemic.

They argued it isn’t a wise economic decision to take more off workers’ paycheques and to charge businesses more when many are still struggling.

The details are in a letter Saskatchewan Finance Minister Donna Harpauer sent Freeland two days ago, a copy of which was obtained by the Canadian Press. Harpauer’s office confirmed the authenticity of the letter, saying her provincial counterparts raised the issue during a Nov. 20 teleconference with Freeland.

Any changes to contribution rates or the earnings ceiling at which point contributions topout would need the approval of Parliament and seven provinces representing at least two-thirds of the national population — a higher bar than what’s required to amend the Constitution.

Freeland is to deliver an economic update on Monday that should provide a full accounting of all federal spending on the COVID-19 pandemic to date.

The document will also detail the depth of the deficit this year, last estimated in July at $343.2 billion, and is expected to outline some new spending.

In her letter, Harpauer asked Freeland to use the document to announce a delay in any CPP contribution increases until at least 2022, when the country hopes to see “a recovery from our current economic difficulties.”