British Columbia, Prince Edward Island, Nova Scotia, New Brunswick, Manitoba and Ontario are calling on the federal government to keep a modest enhancement to the Canada Pension Plan on the table as part of a package of reforms that would make saving for retirement easier, more affordable and more secure for Canadians.
Finance ministers from across Canada are meeting today in Kananaskis, Alta., to discuss pension reform in Canada. But several governments and groups are reacting, positively and negatively, to Finance Minister Jim Flaherty’s proposal for a pooled registered pension plan (PRPP). The defined contribution plans would be administered by a third party, likely a financial institution, and allow small businesses that otherwise could not afford their own plan to offer a retirement savings vehicle to employees. Self-employed workers would also have easier access to a private pension plan.
While Alberta and Quebec came out in favour of Flaherty’s announcement, B.C., P.E.I., Nova Scotia, New Brunswick, Manitoba and Ontario expressed concern at Flaherty’s suggestion a modest CPP enhancement was no longer being considered.
“The provinces have heard strong public support for such an enhancement as an integral part of the retirement income solution. Progress on CPP should not be deferred,” said a release from the six provinces.
The CPP provides a secure, fully indexed, defined benefit pension to virtually all working Canadians and is fully portable across Canada. While more private sector pension innovation is fully supported, it should not be used as a reason not to make progress on CPP, said Ontario Finance Minister Dwight Duncan.
A modest, phased-in and fully funded expansion of the existing CPP is the most practical approach to strengthen the retirement income system in Canada, said Manitoba Finance Minister Rosann Wowchuk.
The six provinces said they would like to see “measurable progress” on the following reforms:
• A modest, phased-in, fully-funded enhancement to CPP. Any CPP changes would have to be affordable for both employees and their employers.
• Pension innovation to provide more Canadians with access to low-cost pensions. A harmonized, pan-Canadian framework should be developed, focusing on simplicity and plan member protection.
Making progress on a moderate expansion of CPP is important for the long-term adequacy of Canada’s retirement income system, said B.C. Finance Minister Colin Hansen.
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