Advocates see support for CPP expansion growing in advance of ministers meeting

The Canadian Press
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OTTAWA—Advocates for enhancing the Canada Pension Plan (CPP) 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 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 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 he does not yet have all the necessary provincial support — seven out of 10 provinces representing at least two-thirds of the population — with holdouts 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. The organization this week released results of a survey of more than 2,000 members showing that 71 per cent “do not believe the current government deserves power if it does not expand CPP.”

Organizations: Canadian Federation of Independent Business, House of Commons.The, Canadian Association of Retired Persons

Geographic location: Ottawa, Prince Edward Island, Ontario Canada Alberta British Columbia New Brunswick

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