No. 1 on the list at Flaherty’s finance meeting: CPP reform


Nathan Denette/CP

OTTAWA – Advocates for enhancing the Canada Pension Plan say they are approaching the consensus required to press ahead with reform that would see both premiums and benefits rise in the future.

Expansion of the pension plan will be the No. 1 item under consideration at the annual end-of-year meetings of federal and provincial finance ministers, which take place Sunday and Monday in Ottawa, and some see momentum building for an agreement in principle.

Pressure has been growing since Prince Edward Island’s Wes Sheridan released his modest proposal in early October to nearly double contributions over three years, resulting in a near-doubling of maximum annual benefits to $23,400 from the current $12,150.

While no plan is likely to win approval Monday, Sheridan believes that ministers will be able to agree on a statement in principle that the pension plan must be enhanced, with the details to be hammered out later, possibly as soon as next summer.

“All of us want to do what’s right for Canadians, we just have to find a middle ground to make sure there’s a compromise where we can bring forward an enhancement that is modest and fully funded, and I think we will do that on Monday,” Sheridan said in an interview.

“What we need to come out Monday is that we all say, ‘Yes, CPP enhancement must be part of the overall retirement system in Canada.”

Sheridan admits that he does not have as yet all the necessary provincial support — seven out of 10 provinces representing at least two-thirds of the population — with hold-outs including Alberta, British Columbia and New Brunswick.

Finance Minister Jim Flaherty has also been cagey about his position.

Flaherty has said enhancement is not a bad idea, adding that the economy has to be able to afford it “at the appropriate time.” Kevin Sorenson, the minister of state for finance, has been much more unequivocal: raising premiums would “take more money out of the pockets of employees and force employers to cut jobs, hours and wages,” he wrote in a recent newspaper column.

The federal ministers have often cited the Canadian Federation of Independent Business for their claims that enhancement would kill jobs, although advocates say the alarms are unjustified. They point out there was little evidence of Canadians losing jobs the last time pension premiums were raised in the 1990s.

Aside from P.E.I., the most vocal advocate for pension reform is Ontario. Finance Minister Charles Sousa has introduced a motion in the provincial legislature that warns the province would seek to go it alone if Ottawa does not lead the way.

The motion, which says “Ontario should pursue its own solution to enhancing retirement security should the federal government not respond in a timely fashion,” resembles one debated Monday in the House of Commons.

The Ottawa and Ontario resolutions are likely meant more to apply pressure and to flush out party positions on the issue than achieve results, since no one level of government or jurisdiction can act alone.

But Susan Eng of the Canadian Association of Retired Persons said she believes the chances of some agreement on enhancement have improved since the last time it was on the agenda in 2010. At that time, it was considered too soon after the 2008-09 recession, so the ministers opted for a voluntary program called the pooled registered pension plan, which has met with sporadic support.

Eng is not above applying pressure herself. On Sunday, the organization released results of a survey of over 2,000 members showing that 71 per cent “do not believe the current government deserves power if it does not expand CPP.”

The survey also found that more CARP members support the Liberals than the Conservatives by a margin of 43 per cent to 31 per cent.

The results are not “a whim,” Eng said. Her members have been polled repeatedly on the issue, she said, and have consistently supported reform even though they know they won’t personally gain from higher benefits, since the payout will be for future generations.

“People understand there is a necessity for it,” she said, pointing out that more and more of today’s workers have no company pension plan.

Sheridan agreed, saying that Canada’s workforce is increasingly either self-employed, on contract or part-time, meaning they do not have access to company pensions.

Alberta Finance Minister Doug Horner, regarded as the biggest roadblock to enhancement, said he is open to looking at all the options, but remains a skeptic.

“I’ve had several businesses who have told me what the impact would be and it’s significant, it’s not something we should take without due caution and attention,” Horner said.

“While we’re open to discussion, we don’t want to do something that impairs the ability of employers to employ people.”

One possible compromise, he said, would be a supplementary CPP plan in which employees can voluntarily increase their contributions, which would be automatically withdrawn from their paycheques.

Another is that contributions would only start being raised once certain economic “triggers” — such as a bar for employment levels and economic growth — are met.

That would be acceptable to Eng, who noted any change in premiums would not take effect for three years, after which hikes can be phased in over a longer period. That should give the economy plenty of time to recover fully from the recession and employers to adjust, she said.


No. 1 on the list at Flaherty’s finance meeting: CPP reform

  1. Once again, young Canadians are forced to pay into a program that they’ll never get to use. Time for us to stop propping up this ponzi scheme. It’s a transfer of wealth from the poorest to the richest.

    • I think you need to elaborate on that, if you can. Isn’t calling the national pension plan a “Ponzi” scheme straight from the GOP/TeaBagger lexicon?

      • This comment was deleted.

        • You’d be whiny if older people were robbing you blind.

          • Nobody’s robbing you blind….get off your ass and work for it, the same as everyone else had to do.

          • Ah, but previous generations there was the security that these programs would still exist. Already I’ll have to work longer than you to access CPP and CPP is (and has been for years) failing to keep pace with the cost of living.

          • There still is. Do you think Canada will disappear?

            Cons never count GDP….just debt.

          • There still is…

            You didn’t finish your sentence. There still is what? I’ll tell you what there still is. There’s still a $34 billion – billion with a “b” public sector pension shortfall coming, that’s not even counting CPP, that my generation will have will have to pay for. Even though we have lower wages and higher taxes.

            Thanks. Hope you’ve enjoyed (and will continue to enjoy) exploiting the younger generation with your entitlement.

          • There still is….that security. What? Are you another Con that can’t connect the dots? That’s the basic skill that makes us human ya know….

            There is no shortfall coming. Canada’s current GDP is about 2 Trillion….I repeat…this isn’t Somalia.

            And your generation is the healthiest, best educated, longest lived generation in all of human history. You’re welcome.

          • “Even though we have lower wages and higher taxes”

            Not to mention unaffordable housing and fewer people who will benefit from pensions than those in the past two generations.

          • And, of course, the more I work, the more the government takes to give to people, like you, who’d rather live off my labour than work.

          • Well sonny, I paid for your education, your healthcare, your transportation, your safety…..all your life. So stop whining and do your share.

          • Well, I paid a larger share of my education than any other generation in Canadian history.

            And my share is paying for your retirement? The entitlement of your generation is disgusting.

          • No you didn’t. You got free elementary and secondary….and subsidized university.

            Your share is paying for what everyone else pays for. Stop whining and kick in.

          • Well, I did pay a larger share than any other generation of students in Canadian history. That’s a basic fact. My tuition was subsidized less than yours. Fact. End of story.

            My generation has paid more for less than yours. Fact. And given basic demographics, we will continue to.

            I do kick in. I pay my taxes.

            But I’m tired of being exploited by the lazy and entitled. That’s not whining. I just want my FAIR share.

          • LOL I discovered your problem.

            You haven’t GOT an education.

          • You’re so funny and smart.

          • Cute too.

          • You must have a nice Union job Emily….or whoever you are.

          • Noop…..I run a business. But your jealousy of unions is duly noted.

      • Isn’t ripping off the youth to pay for your retirement, using a system that is only sustainable through a growing population the very definition of a ponzi scheme? The national pension plan won’t be around when I retire, why should I have to pay for it?

        • Taxpayers have been paying forever for all kinds of government programs which come and go, whether they personally benefit from it nor not. That’s life buddy. Suck it up. You may enjoy the greatest health and never need health care. Does that mean you shouldn’t help to fund it? It’s not a pay-as-you-play world.

          • The difference is that other government programs – like health care – are there if I need them. CPP won’t be.

          • Well, actually, you don’t know that. Some economists were predicting that when I started my working life and I’m now retired and guess what? It’s still there. And not all financial experts agree that it’s not sustainable. As well, I could have chosen any number of government programs to illustrate my point rather than health care. Your reply misses the point. Society is based upon everyone contributing to a pool of taxes to fund programs for the general betterment of society. You don’t get to pick and choose the programs that you personally want to support. If you think that CPP will be gone before you qualify for it, then I would suggest that you get active to fight to ensure that it remains in place. Accepting that it won’t be around just because SOME economists predict it won’t is foolish.

        • It’s a “universal” program, there is no wealth transfer. You get a capped return in exchange for your contributions, and its a healthy plan. I think that I need a citation of: “won’t be around when I retire”. Let’s see, I assume you’re what, 18? BTW There is no mention of that in the article, where did you get it?

          • Wait, you actually think that CPP will be around in 10 years, let alone in 30?

            It is an accepted fact, you can talk to any economist, that the CPP system is totally unsustainable. Keep your head in the sand, you won’t have to worry about it!

            I’m quite a bit older than 18, gainfully employed and well aware that I’ll never have the chance to retire. I don’t mind that. But what I do mind is having to pay for the retirements of people who are so entitled that they think it’s the government’s job to take care of them and didn’t even take proper steps to save for their goals.

          • You clearly have a misguided view of what CPP is. I paid premiums my entire working life for that “benefit”. It’s not a handout as you imply. I also saved for my own retirement. CPP isn’t the huge payout that you seem to think. I think that if you honestly believe that you won’t ever be able to retire, maybe you need to find a better job, or be willing to make adjustments to your lifestyle. Quit whining and do something about it. It’s better to light a candle than to curse the darkness. There are lots of people with very modest incomes that live a frugal and thoughtful lifestyle and still manage to save and retire.

          • Um. That’s not how CPP works. They payments you paid went to the people who were collecting CPP at that time, then when you’re able to collect, the money from the people who are paying in is what’s paid out to you. Some of the money is invested but that’s not enough to cover inflation and the fact that people DO get back more than they paid in. The system requires a growing population of workers to be sustainable. Given that we are rapidly moving toward a demographic crunch, it is just not sustainable. That’s just basic math, the system is unsustainable.

            I have a great job, it’s challenging and rewarding. I’m lucky to have it. I’m not sure if you’ve noticed but this country still has one of the worst employment outlooks since the Great Depression – the youth unemployment rate is 17 per cent and that only counts the people who haven’t given up and the people who haven’t gone back to school. One doesn’t just “get a better job.” I’m thankful that I have work – let alone work that I enjoy. Most people my age aren’t that lucky. It must have been nice growing up in a magical land where people could acquire good jobs just by asking for them.

            If you’re so entitled that you think stating basic fact is whining, then that’s your problem, not mine. I vote. I participate in the public discourse. But you’d probably call that “whining,” well, that’s what living in a free society looks like buddy.

            And I do live a frugal lifestyle. I’m still paying off the $23,000 in student debt I had to take on just to go to university (worked the whole time too).

          • I could go back and forth with you on this for ever but it’s pointless. You are very lacking in life experience. You make a lot of assumptions, all of which are incorrect. You have no idea of the challenges which I’ve personally faced in my life and which I’ve worked hard to overcome. You wouldn’t know this from your limited experience but employment rates and the job situation have been bleak for many years now, in fact for all of MY working life, so quit feeling like you’re the only generation to have it tough. Another proverb for you… it’s better to remain silent and be thought a fool than to open your mouth and remove all doubt. You say you have a great job, and then you say you will never be able to retire. Hmmm, sounds like a bit of a disconnect there. And jobs were never there just “for the asking” throughout my working life. I did what I had to to make the changes in my life that I wanted. No handouts, no magical land. So, yes, you are whining. You’re just too young and foolish to realize it.

            By the way, the survival of ANY government program is simply a matter of political will, where the government chooses to spend our money. You’re adamant that CPP will be gone, yet you seem to believe that universal health care will still be around (despite constant on-going cuts to the program), you don’t seem worried that EI will disappear, or Workmen’s Comp, or any other program. But absolutely CPP will be gone. If your attitude is representative of others your age, well then I suspect that you will see your prediction come to pass. And it will be self-induced.

  2. Raise in the future? Must do it ASAP – CPP is a shame, run by mad Neo-Cons, some of you have voted for. Our semi dictatorship is working folks.

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