The Globe and Mail reports, “Finance Minister Jim Flaherty is soon expected to call a meeting of his federal and territorial counterparts, who will gather for the first time since they agreed on a ‘way forward’ on CPP reform six months ago at Meech Lake. …Ministers agreed in December to look at potential economic triggers such as GDP growth and the unemployment rate that could be used to show the economy is strong enough to absorb higher CPP premiums to pay for increased CPP benefits. …Prince Edward Island is putting together a new proposal to enhance the Canada Pension Plan in the hope of getting Ottawa and the provinces on board.”
But, “The federal Conservatives have been cool to CPP reform, arguing that the focus should be on Pooled Registered Pension Plans (PRPPs) – a federal initiative that must be approved province-by-province. …The PRPPs would operate like a group RRSP. Employees could make payroll contributions, but employers would not be forced to contribute. To date, British Columbia, Alberta, Saskatchewan and Quebec have all introduced PRPP legislation. All provinces support PRPPs in principle. (Former Ontario finance minister Dwight) Duncan took the position that Ontario would only proceed with them if Ottawa agreed to increase CPP premiums and benefits. …Mr. Duncan said it’s clear that another voluntary savings vehicle like the PRPPs won’t address the problem of Canadians not saving enough for retirement.”
Fading political momentum?
The article also notes, “Since December, there has been little public discussion of the issue, leading some to suggest momentum on CPP reform has faded. Finance Minister Jim Flaherty had said officials would report back to the ministers in six months, yet six months later, no meeting has been announced. …Government officials and groups that closely follow pension reform indicate that the political dynamic has shifted considerably since December. One key factor is Mr. Duncan’s resignation as Ontario finance minister to work at a Bay Street law firm. Mr. Duncan had been the lead provincial voice in support of enhancing the CPP. …The May 2 Ontario budget – delivered by new Finance Minister Charles Sousa – said Ontario would continue to support a modest CPP enhancement and would introduce legislation to implement PRPPs.”
In January 2012, Prime Minister Stephen Harper pledged to the world’s corporate elite in Davos, “We’ve already taken steps to limit the growth of our health care spending. We must do the same for our retirement-income system.” His government had already announced a unilateral cut of $36 billion over a ten year period to health care spending, and just a few months after Davos his government used its false majority in the House of Commons to pass C-38, a budget implementation bill that will increase the eligibility age for Old Age Security from 65 to 67.
Last December, the Globe and Mail reported, “Positive comments from the (finance) ministers mean that a major national policy move that had largely disappeared from public debate is now very much on the agenda and could be approved by the end of 2013.” Ontario and Quebec are reportedly in support of enhancing CPP benefits, while Alberta is the most resistant. And while federal bureaucrats have recommended a modest expansion of the CPP, Flaherty has worked to sabotage the process.
The Council of Canadians joins with CUPE and many others in demanding that the finance ministers:
support the Canadian Labour Congress’s proposal to double Canada Pension Plan benefits to ensure a better minimum pension for all Canadians. The CPP replacement rate would double from 25 per cent to 50 per cent, which would push maximum payments to $24,000 per year and average payments to $12,600 per year.
ask the federal government not to stand in the way of the provisions of the Canada Pension Plan legislation, which states that 2/3 of the provinces representing 2/3 of the Canadian population can approve amendments to the plan.
refuse any delay or limits on when improvements will come into effect or who will have access to improved CPP.
In the 1990s, the Council of Canadians launched a massive three-year campaign against the Chretien government’s plan to ‘restructure’ of pensions in Canada – and won. That historic campaign included a petition that drew half a million signatures.
For more, please read:
NEWS: Major national policy move on expanding the CPP to be discussed in June
VIEW: Flaherty sabotaging doable pension benefit increases
UPDATE: Council calls for increased pension benefits as finance ministers meet at Meech Lake
UPDATE: Preparing for the fight for pensions in Canada