Ottawa, provincial finance ministers set for showdown on CPP enrichment


OTTAWA – Finance ministers from across Canada are heading toward a showdown in the next two days on an issue they’ve kicked around for years — whether to boost the Canada Pension Plan to ensure seniors have adequate income for the rest of their lives.

The topic is on Monday’s agenda for the concluding session of a federal-provincial meeting that starts Sunday in Ottawa, but it will be hard to keep the issue from spoiling someone’s supper at the opening dinner.

There’s been hardly any other topic mentioned leading into the sessions, with proponents and detractors issuing polling results that back their view. Ontario — along with Prince Edward Island, the main backer of CPP enhancement — is threatening to go it alone if federal Finance Minister Jim Flaherty does not come aboard.

Many believe the Ontario minister, Charles Sousa, is bluffing but he stuck to his guns in an interview with The Canadian Press.

“We have the critical mass in Ontario, there’s folks interested in providing those made-in-Ontario opportunities as an offset to CPP if it doesn’t come forward, so I’ll look at them seriously,” he said.

Most observers — including the idea’s staunchest critic, Dan Kelly of the Canadian Federation of Independent Business — say momentum is with the advocates of enhancement. Most proposals call for roughly a doubling of maximum annual CPP benefit above the current $12,150, which of course would mean doubling premiums that are split equally between workers and employers.

Kelly has been arguing — and some governments have taken up the call — that any premium increase from the current 9.9 per cent of pensionable earnings is a job killer, for the simple reason that if it costs firms more to hire workers, some will choose not to.

By Kelly’s count, the pro-enhancement provinces include Ontario, Manitoba, Newfoundland and Labrador, and P.E.I.

British Columbia, Alberta, Saskatchewan and Nova Scotia are “lukewarm,” with New Brunswick undecided. Quebec, which has a vote even though the province operates its own pension plan, appeared to signal Friday it would join the Yes camp if only to keep premiums in the rest of Canada in line with its own.

The federal position has vacillated between “now is not a good time,” to “CPP premiums are a job-discouraging payroll tax.”

For approval, any enhancement would need seven provinces representing two-thirds of the population, so at present the Yes camp is likely at least two provinces short.

Still, Kelly acknowledges he’s worried about Monday’s outcome.

“The piece that’s causing us to take this seriously is that the other provinces are not saying, ‘No, not ever,’ they’re saying, ‘No, not now.’ The view of small business is that we don’t believe this is a good measure ever,” said Kelly.

Sousa, and P.E.I. Finance Minister Wes Sheridan, who has tabled a specific proposal that would begin in two years and be phased in over the following three, believe the time has come to move ahead.

The idea was shelved in 2010 because it was felt the economy, just one year removed from a deep recession, was too fragile to withstand even a modest increase in payroll taxes. But with the recovery well underway and with a long phase-in period, the excuse rings hollow, proponents say.

To make the medicine go down more smoothly, Sousa said the proponents are willing to agree to conditions that the economy must be performing at a specified level of strength before CPP enhancement can proceed. As well, he won’t ask ministers to vote on a specific plan, only to agree in principle to go ahead when conditions are met.

“The question isn’t how much of a CPP we need to do — we’ll have to deliberate over that still,” he said.

“The question before us is, ‘Are the objectives of enhancement of CPP appropriate? And then do we put some thresholds to establish enhancement when times are good?’ And then when times are good, they are ready to go.”

Sousa said he believes that will be sufficient to carry the day Monday afternoon.

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Ottawa, provincial finance ministers set for showdown on CPP enrichment

  1. Prince Edward Island’s proposal calls for a three percent increase in premiums, shared between employee and employer, to be phased in over time. Not a doubling, although the impact on the benefits would be significant.

    • Just makes it less economical to employ people. But they will get transfers to cover, as we reward too much stupidity in this country.

      If Ottawa really cared about the productive people, CPP/EI would go to a LIRA in your name/account/control and that way government can’t change the rules after they get your money.

  2. Hmmm lot of paradigm shifting going on. We might even get a pension for the 21C out of it.

  3. Government greed. Why pay more for less? Get it in your name/account/control where you define the rules. No need to wait for government 67 when YOU define your pension plan in your name/account/control. But Ottawa wants control…and not in your interests to elt them have it.

    Sorry Flaherty, you can’t swindle my pension…. And thing too is I put no more money in my RRSP than I and my employer paid in CPP… and I chose my retirement date. Better yet, if I die my spouse/estate get the value.

    Pooled plans are pooled scams be they public, private or CPP….its a tax people.

  4. Yep, just means more wage pressures in an already anti-competitive country where people need high wages to support Ottawa bloat.

  5. The Feds wish ordinary old folks will die before their CPP collection date kicks in – yet those work in Ottawa receive a generous pension. If you are not one of them, pray that the “assisted suicide formula ” kicks in soon.

  6. 10% is enough already. Young people need to save to be able to buy houses at record-setting prices. They need to save for tuition and save to start a family. The last thing they need is for their earnings to be diverted to wealthy seniors. Taxes are high enough already, and seniors are in better financial shape than young people. Canada is supposed to be a free country.
    The reality is, this is about greed. This is about the greed of older generations confiscating the earnings of younger generations.

    • You’re free to leave for Somalia anytime.

      • So are you.

        • I’m not the one pro-gun and anti-taxes.

          • Neither am I.

            These last two comments from you make no sense.

          • You lose track of your own comments?

            ‘Taxes are high enough already, and seniors are in better financial shape than young people. Canada is supposed to be a free country.
            The reality is, this is about greed. This is about the greed of older
            generations confiscating the earnings of younger generations.’

          • I am not anti-taxes, I said they’re too high. I have no idea why you’re talking about guns, nor do I have any idea why you’re talking about Somalia. Are you on drugs?

          • Rightwingers are usually anti-taxes, anti-govt and anti-gun control.

            Which makes Somalia their ideal country.

            But oddly enough I never find any rightwingers keen to move there. They prefer to stay here and complain.

          • I’ll ignore the stupidity of your comment and your complete ignorance of what typical right-wingers want.
            Instead I’ll point out that Somalia’s main problem is an Islamist insurgency that wishes to impose Sharia law and has assumed control over much of the country. It was also ranked to have the most corrupt government in the world by some organizations.
            So it’s main problem is not a lack of government, instead it is the government itself that is the main problem in that country, in addition to Islamic religious nationalism and some of the most deadly Islamic terrorist organizations in the world, including the group that tortured and killed dozens of people in a Kenyan shopping mall.
            It has a corrupt government controlling part of the country, an Islamist terrorist insurgency imposing Sharia law and executing Christians in other parts of the country, and a civil war between the two of them.
            You live in a cartoon world. You know nothing.
            I don’t even know how these crazy ideas even enter your mind, this has nothing to do with anything I said, nor has it anything to do with the article.

          • I was in the Reform party. I know what rightwingers want.

            I know too that they hide behind blather when they don’t understand the topic.

            I also know you said Canada wasn’t Somalia in a post in the last couple of days

            Have a nice day.

          • Yes, I did say Canada was not Somalia. It isn’t, obviously. What I said made perfect sense in the context I said it. Yours made no sense at all, since you know nothing about Somalia. You should rejoin the Reform party, because you didn’t learn much about them either.

          • If you don’t understand it….find something else to talk abou.

          • I was talking about something else, you idiot, until you came along and brought up this nonsense.

          • You lose track of your own comments….you just keep commenting anyway.

            No wonder you can’t get on in life.

          • Ever notice whether it’s me or you or Keith Bram or JanBC or Glynmohr or any of a dozen other commenters, every thread where Emily gets involved immediately becomes derailed? And then the clincher – she will accuse the other party of being off topic, or of not understanding the issue. This is typical of some seriously disturbed whack jobs. They are convinced everyone else is nuts.

          • Yes. Also, I’ve always noticed she also has a hangup about getting in the last word. It’s kind of nuts. If you say anything at all, she needs to reply. Doesn’t matter what you say, she needs to correct it. Try it sometime. It’s actually obsessive compulsive.
            To be fair, I think Ron Waller is crazier.

          • Frankly though, most of my conversations get derailed on this comment board, in the same way Emily does it (with utter nonsense), but not as extreme as her.