Provinces agree on pooled pensions, but CPP changes will have to wait
Posted Dec 20, 2010 9:20 pm.
This article is more than 5 years old.
Federal Finance Minister Jim Flaherty says the provinces have agreed on a framework for pooled pensions, but talks on whether to revamp the Canada Pension Plan will have to continue.
Flaherty had gone into a meeting of his provincial and territorial counterparts on Monday floating an idea for a new private-sector plan with pooled resources from small firms, employees and the self-employed.
Afterwards, Flaherty said finance officials will talk with employees, employers and financial institutions in the next month to make sure the plan meets their needs.
Finance ministers from six provinces had said they were not necessarily opposed to the pooled pension idea, but they also said CPP improvements were necessary to ensure Canadians have adequate income in their retirement.
Flaherty said that discussion will continue around the middle of next year. Ontario Finance Minister Dwight Duncan said he was glad the CPP discussion would be on the table at the next finance ministers meeting in June.
“What we’ve always said is we are prepared federally to work on improvements to the Canada Pension Plan as part of our review process, but not implementing anything right now,” Flaherty had said before going into the meeting in Kananaskis, Alta.
“Right now is probably not a good time to impose any more burdens on employers in Canada because the economic recovery is fragile. We want to continue to create jobs in Canada, so we have to be cautious and moderate in what we do, and it needs more work in any event.”
Alberta Finance Minister Ted Morton threw cold water on the notion that CPP changes would get much support from his province.
“It’s hard to imagine much interest in pursuing that in Alberta,” he said as he left the meeting. The province was one of three that had supported Flaherty’s private-sector plan from the beginning.
Gil McGowan, president of the Alberta Federation of Labour, said he doesn’t buy the idea that improvements to the CPP have to wait until the economy improves.
“This argument that a recession is no time to make major policy change is a red herring because there are all sorts of ways to get around those concerns,” he said.
For instance, McGowan suggested, finance ministers could agree on a policy Monday, but phase it in gradually or wait until 2012 or 2013 to enact it.
“We had a real opportunity and I think we still have one to make a game-changing policy change that will improve the lives for future generations of Canadians,” he said.
“Our hope is that the provincial finance ministers who support CPP expansion will be successful in encouraging Jim Flaherty to come to his senses and realize that his original position in support of CPP expansion is really in the broader public interest.”
While the ministers were at the meeting, protesters occupied Morton’s Calgary constituency office protesting the province’s position on the CPP.
The Canadian Taxpayers Federation voiced support for Flaherty’s private-sector proposal. It said a CPP hike would only mean higher costs for small businesses.
“At the end of the day the best way for government to help Canadians save would be for them to leave more money in the pockets of taxpayers,” said federal director Kevin Gaudet.
The Canadian Restaurant and Foodservices Association also urged Ottawa not to increase CPP premiums, suggesting it would be low-income, entry-level workers who would shoulder the greatest burden.
“It is unfair to propose across-the-board increases in CPP premiums when the objective is to provide enhanced benefits for higher-income earners, who may not have adequately saved for retirement,” said president and CEO Garth Whyte.
“This approach will reduce take-home pay for lower-income employees and jeopardize jobs, particularly for youth.”
