Ontario Premier Kathleen Wynne is seeking her legislature’s blessing for an expansion of the Canada Pension Plan in a final push ahead of a crucial federal-provincial meeting next week.
“It is our responsibility to make sure the people of Ontario can retire securely with comfort, dignity and confidence,” Ms. Wynne said in the legislature Wednesday. “This is a social imperative, yes. But it’s also an economic imperative. If we do not address this looming crisis, we will all have to contend with the consequences.”
Ms. Wynne tabled a motion calling for the provinces and federal government to agree to enhance CPP.
Finance Minister Charles Sousa and his fellow provincial and territorial treasurers are meeting with their federal counterpart, Jim Flaherty, at Meech Lake, Que., where Ms. Sousa will try to get a CPP agreement. Under Mr. Sousa’s plan, workers and employers would pay more into the plan now and receive richer benefits on retirement.
The federal government has left the door open to enhancing CPP, but is wary of doing it, arguing the extra cost would be a large burden for corporations to bear. Some business groups are against such a move for the same reason.
Some provinces – such as Manitoba and Prince Edward Island – are staunchly in favour of enhancing CPP. Alberta, meanwhile, is on the fence. Premier Alison Redford said last month she has not made a decision on whether to support an enhancement, and is waiting to see how the discussions play out.
Among other things, the finance ministers must decide exactly how much CPP would increase by and how much the economy would have to improve before it kicks in.
Ms. Wynne and Mr. Sousa met with senior citizens’ lobby group CARP, which has been pushing CPP expansion, Wednesday morning.
CARP’s members are threatening to vote against any federal party that refuses to enhance CPP. They argue that concerns over its effect on business are overblown.
CARP member Bernice Rempel, a 69-year-old retired municipal worker who lives in Edmonton, said she is championing CPP enhancements to ensure younger generations – including her granddaughter’s – have enough to retire on.
She said Pooled Registered Pension Plans, which Alberta and other provinces have brought in recently, are not enough, because they rely entirely on individual contributions “That isn’t really practical, because the person working two or three jobs at a time doesn’t have anything left over to put away for the future,” she said.
Meanwhile the Canadian Federation of Independent Business – one of the leading advocacy groups speaking out against a CPP increase – released a new public opinion survey showing concern among working Canadians and small business owners about mandatory CPP hikes.
The poll found only 23 per cent of working Canadians said a mandatory increase in CPP premiums would help them save more for retirement. Those surveyed were far more likely to say a mandatory increase would reduce their ability to spend on essential goods and services and reduce their ability to take advantage of other savings vehicles like RRSPs and Tax Free Savings Accounts.
A large majority (72 per cent) of small business owners said higher CPP premiums would increase pressure to freeze or cut salaries and 55 per cent said it would lead to reductions in business investment.
Small business owners said the best way for government to help Canadians save for retirement would be to control government spending and reduce taxes to allow Canadians to contribute more towards retirement savings.
The CFIB commissioned an online opinion survey of 1,607 employed Canadian adults by Angus Reid Global that was conducted between Nov. 28 and Nov. 30. The margin of error is plus or minus 2.5 per cent, 19 times out of 20. The CFIB also conducted an online survey of 8,346 CFIB members between Nov. 26 and Dec. 9, 2013.
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