WINNIPEG – A week after opting out of a deal to boost the Canada Pension Plan, Manitoba says it wants Ottawa and the provinces to consider a raft of amendments.
Manitoba, along with Quebec, refused to sign the agreement last week in Vancouver, in part because people need to set aside their own retirement savings. Premier Brian Pallister said.
On Monday, he said the province wants to see changes made that would help people who are on the verge of retirement as well as those retiring decades from now.
“The Canadian pension plan was designed to be part of Canadians’ retirement security,” he said. “But it was designed a half-century ago. It is time to bring the CPP into the 21st century, into the new millennium. But not just for millennials. For all Canadians.”
The deal, which is to be finalized next month, is to be phased in starting in 2019. By 2023, an extra $34 a month in pension premiums will mean up to $4,300 more in annual retirement benefits for the average Canadian wage earner.
The maximum annual benefit is to increase by about one-third to $17,478. Employers will see their premiums increase as well.
Manitoba wants to see Ottawa stop clawing back part of the survivor benefits for widowed seniors, Pallister said. The province also wants to see the one-time death benefit paid to the estate of a CPP contributor indexed to inflation.
Such suggestions have been made in the past but have “fallen on deaf ears,” he said.
If the deal stays as it is, Pallister said, Canadians will regret it.
“I think a year from now, we’d look back and say, ‘That was a missed opportunity back there’ and it will be too late,” he said. “It’s critical that we use the consensus that seems to have emerged.”
Pallister, who worked for decades in insurance and financial planning, stressed again that CPP is just one part of a retirement plan.
“I don’t think I can overstate how important it is for Canadians to get back in touch with the reality that they need to save as well in other ways. This will not do it for everybody.”
Manitoba Finance Minister Cameron Friesen said Manitoba wants to look at ways to help people who have left the workforce to raise children catch up more quickly. The province also wants to avoid “rate shock” for higher-income earners by phasing in their increased contributions more slowly.
Friesen wouldn’t say who he has been talking to, but said there is growing support among his peers for some of the ideas Manitoba is putting forward.
“These and other examples must be explored,” he said. “We have an opportunity and an obligation to get this right for all Canadians.”