Governments face mounting pressure from labour and special interest groups about what to do with the Canada Pension Plan ahead of a federal-provincial finance ministers’ meeting at Meech Lake Monday.
All the while, there’s a divided outlook among the provinces about whether or not to expand CPP/QPP, and how.
Only after P.E.I.’s finance minister, Wes Sheridan, released a proposal this fall to almost double CPP contributions over three years, and Ontario premier Kathleen Wynne said she’s on the side of enhancing CPP as a social and economic imperative, did it start to look like something – anything – could happen to change the pension plan formula.
The federal government, though, remains skeptical about doing so.
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“We all want a stronger retirement system but we are wary of the significant costs – including smaller paycheques and lost jobs – for Canadian families and the risk to our economic growth a CPP expansion would trigger,” said minister of state for finance Kevin Sorenson in a statement.
For any change to happen to CPP, two-thirds of the provinces and the feds need to be behind it as part of its amending procedure.
On the side of expansion are P.E.I, Ontario, Newfoundland and Labrador, Manitoba and – it’s assumed – Quebec. New Brunswick, Nova Scotia, and Alberta aren’t so keen – or say they’re waiting so see how discussions play out before making a decision about enhancement.
In a statement B.C. finance minister Michael De Jong said the province supports expanding the “range of options under consideration to include the PEI proposal,” but that concerns of low-wage businesses and low-income workers need to be taken into account.
Few are expecting a final agreement on what, if anything, the federal and provincial governments would do to change CPP – a specific formula, since there have been a few tossed around.
Susan Eng, Vice President for Advocacy at the Canadian Association of Retired Persons(CARP), says what’s more important is that finance ministers walk away from Monday having said “yes” to CPP expansion.
But of course, it isn’t just provincial governments and the feds that aren’t exactly seeing eye-to-eye about CPP. The topic also pits organizations and special interest groups against each other.
The Canadian Labour Congress(CLC) and CARP are strong proponents of enhancing CPP, which, they argue, will protect Canadians in the future from retiring in want.
The CLC took some time on Thursday to push the issue in Ottawa. At a press conference for Parliament Hill reporters, CLC president Ken Georgetti discussed the organization’s proposal of doubling CPP over a seven-year phase-in. This, the organization says, would raise the basic pension floor for retirees in the future from the current $12,150 to $24,300.
Georgetti added that leaving pension plan reform up to the provinces would be a mistake, and that the federal government needs to take a lead role.
Other groups, such as the Canadian Federation of Independent Businesses, are warning governments against “going big” with CPP – noting that doing so would increase costs for employers, families trying to make ends meet and the economy, in general, for a potential payoff that no one would see for another few decades.
The group, which represents entrepreneurs across Canada, launched a campaign encouraging governments to refrain from expanding Canadian and Quebec pension plans.
CARP’s Eng told iPolitics last week that much of the criticisms coming from groups such as CFIB are overblown, and not based on evidence or hard numbers.
She added that those arguing that expanding CPP would put a heavy burden on the shoulders of young workers is another misconception – “that’s where they’re wrong.”
CPP enhancement would give young workers the opportunity to contribute more to pension plans, so they can retire with more later, she said.
The debate and discussions continue – with no guarantee of wrapping up on Monday.