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Labour union members march outside a meeting of federal, provincial and territorial finance ministers in Lakeside, PEI, on Monday.ANDREW VAUGHAN

Jim Flaherty has persuaded a majority of provinces to move ahead with increases to Canada Pension Plan premiums and benefits, but the final decision is far from a sure thing because of strong opposition from Alberta and fence-sitting from Quebec.

Several other provinces who say they support the federal Finance Minister's plan also want assurances that hiking premiums on the pay cheques of Canadians - however modest and gradual - won't cost Canadian jobs at a time when the economic recovery remains fragile.

The short-term issues of the recession and phasing out stimulus spending remain front-of-mind for Canada's finance ministers, who wrapped up two days of meetings at the Crowbush Golf and Beach Resort on the north shore of Prince Edward Island. But they also agreed to tackle a pension problem they acknowledge is decades away.

"There's a minority of middle-income and lower middle income Canadians, primarily, who are not saving adequately for their retirement and that is a down-the-road issue, but down the road it will come," said Mr. Flaherty. "We need to take steps now to deal with it."

The federal minister announced Monday that he had reached a consensus with a "majority" of the provinces and territories to have officials work out the details on an expanded CPP. Their plan will be submitted for approval at the next meeting of finance ministers in late fall, but probably would not be ready for the spring 2011 budgets.

"There is consensus and there is a majority view," Mr. Flaherty said. "There is not unanimity, but we have a clear direction and there's lots of work to be done by our officials. I think this is a significant step forward."

The ministers agreed to better educate Canadians about "financial literacy," and to legislate new rules that would encourage low-cost, multiemployer pension funds managed by the private sector. These could be used by small businesses, the self-employed or those looking for an extra retirement savings option.

The ministers also rejected a voluntary add-on to the CPP because it would be too expensive to manage.

Government officials must now work out the best way to raise premiums. Pension expert James MacKinnon, who heads the economics department at Queen's University in Kingston, said raising the maximum income for CPP contributions, currently set at $47,200, would target the middle-income Canadians that governments are concerned about. Under that scenario, only Canadians who earn above that amount would pay higher benefits.

While the provinces confirmed that would be part of the discussion, none would weigh in on specifics.

"There's really no actual proposal on the table," said Mr. MacKinnon. "But I think it's a good thing that governments are thinking seriously about these issues."

Majority support is not necessarily enough to change the benefits scheme. Under the CPP rules, Mr. Flaherty needs two-thirds of the provinces on board, representing two-thirds of the population.

Alberta Finance Minister Ted Morton, who argued sharply against the plan, said his criticisms found an audience among some other ministers in the closed-door sessions.

Mr. Morton said an increase in premiums will cost jobs if they are set too high. He also said it takes away choice on the part of individuals who might rather put away that money in a private RSP or save toward buying a home. "It's going to reduce what's in your pay cheque at the end of each week," he said. "The government making a choice for you."

However he praised the decision to move ahead with private-sector pension options which are regulated to keep costs low for consumers. "The reason you need ... government regulation of this type of program is that it's imperative that fees be kept way below what so-called retail RRSP fees are," he said.

Mr. Morton was the only provincial representative to speak publicly against the expansion of CPP. However Quebec was non-committal.

"We aren't for or against what is proposed," said Sam Hamad, Quebec's minister of Employment and Social Solidarity. "However, there are questions on the table and we need to address them as soon as possible."

Union members demonstrated outside the meetings in favour of a doubling of CPP benefits. While the ministers rejected going that far, Canadian Labour Congress Secretary-Treasurer Hassan Yussuff welcomed the move toward mandatory CPP increases and new multiemployer plans.

"We're pleased in terms of where the meeting outcome ended up," he said. "We can have multi-employer plans at very low cost."