Ottawa, provinces talk pensions: inside the closed-doors meeting

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When Jim Flaherty meets with his fellow finance ministers from the provinces and territories, there is always the potential for a surprise.

Two years ago at a late-December gathering in Victoria, the federal finance minister casually mentioned mid-way through the closed door meeting that Ottawa was unilaterally announcing a new formula for health transfers through to the year 2024.

Manitoba's then-minister Stan Struthers fumed at the time, saying his feelings had moved from surprise to anger.

"They just landed this on the table over the lunch hour. It caught us all by surprise," he said then.

Now as finance ministers prepare to gather again in the National Capital region with a Sunday dinner and then a day of meetings at Meech Lake, Canada Pension Plan reform is expected to once again be a major topic.

Talk of pension reform seems to heat up whenever finance ministers meet, but often fades in between. Below is a look back on past meetings to help set the stage for this year's gathering. Changing the CPP requires the support of the federal government and two-thirds of the provinces representing two-thirds of the population. In recent years, the discussion has been complicated by shifting positions from Alberta, Quebec and Ottawa.

Nov. 14, 2008

Alberta and British Columbia trigger a national debate over pension reform, when a joint task force called for a new regional, voluntary defined contribution pension plan that would be managed independently, possibly by the Canada Pension Plan.

May 25 2009, Meech Lake, Que.

Alberta's then-finance minister Iris Evans was a leading voice for reform, recommending a national pension summit as a "stellar approach" to tackling the problem. Ministers approved some minor changes to CPP to make it easier for seniors to work while receiving CPP.

Dec. 18, 2009, Whitehorse, Yukon

After receiving a report from University of Calgary professor Jack Mintz, Finance ministers concluded there is no broad-based pension crisis. They said research shows there is a narrower problem whereby middle-income Canadians are not saving enough to support their current lifestyles in retirement. The ministers promised to look at options for pension reform.

June 14, 2010 Lakeside, P.E.I.

Mr. Flaherty announced that he has convinced a majority of provinces to support mandatory increases in Canada Pension Plan premiums to fund higher benefits.

"I think this is a significant step forward," he said.

Alberta's finance minister at the time, Ted Morton, made it clear that he did not support the idea.

Dec. 20, 2010 Kananaskis, Alta.

At a snowy and isolated mountain retreat, Mr. Flaherty switched his position – noting that without the support of Quebec and Alberta there is not the required threshold for support.

"I think we're all agreed that we should continue our work on the CPP and amending the CPP. This is not the time to proceed with implementation," he said.

The finance ministers agreed that they would all support voluntary Pooled Registered Pension Plans, which would be a voluntary savings option tied to payroll deductions.

The ministers rejected the proposal for a voluntary-add on to CPP that had spurred the original discussions.

Dec. 19, 2011 Victoria, B.C.

Mr. Flaherty announced that after 2016-17, federal health transfers to the provinces will no longer increase by six per cent a year. Instead, a new formula will set increases so that they grow in line with nominal gross domestic product, a measure that includes real economic growth and inflation.

Dec. 17, 2012 Meech Lake, Que.

Finance ministers put CPP reform back on the agenda, suggesting that only details remain before moving ahead with an enhancement.

"We reviewed the work done on the CPP and agreed on a way forward," Mr. Flaherty said. Nicolas Marceau, the finance minister for the new Parti Quebecois government, signaled his province was supportive of a CPP increase. Alberta finance minister Doug Horner said his province was not taking a position until it sees a final proposal.

Dec. 16, 2013, Meech Lake, Que.

The federal position on CPP reform has hardened over the past year. Mr. Flaherty has been quiet on the issue, while minister of state for finance Kevin Sorenson has emerged as a vocal critic of enhancing CPP. Prime Minister Stephen Harper recently told Ontario Premier Kathleen Wynne that Ottawa does not support a CPP change because of concern over the economy.

Ontario has said they will propose their own supplementary pension plan if no deal is reached Monday at Meech Lake.

History suggests the most likely outcome of Monday's meeting is a pledge to keep studying CPP reform. But Mr. Flaherty has also shown in the past that sometimes when finance ministers meet, he has a surprise in store.

Bill Curry covers finance in Ottawa.