Canada Pension Plan reform meeting set for Vancouver

Share

Ottawa and the provinces are working on ways to reform the Canada Pension Plan and have scheduled a meeting for June 20-21 in Vancouver to see if there is consensus on moving forward with a specific plan.

The Liberals promised to enhance the CPP, and Finance Minister Bill Morneau said on budget day in March that he was "personally committed" to reaching a deal with the provinces and territories by the end of the year.

Sources say Ottawa and the provinces have been in talks at both the political and public-service levels on potential options that would be presented at the Vancouver meeting. The size of any increase and the potential impact of any change on economic growth are key aspects of the behind-the-scenes discussions.

Changes to the CPP require the support of seven of the 10 provinces representing two-thirds of the Canadian population, as well as the federal government. Several attempts in recent years to reform the program have fallen short of that mark.

Mr. Morneau last met with provincial and territorial finance ministers in December in Ottawa. At that meeting, they agreed to meet again in June to look at options for reform, with the possibility of making a final decision at the next December meeting.

Saskatchewan has expressed strong reservations about a mandatory increase but agreed in December to participate in the ongoing discussions.

British Columbia and Quebec have also expressed concern, meaning it is not yet clear whether Mr. Morneau will have the support he needs to deliver on his promise.

Dan Lauzon, a spokesman for the minister, confirmed the date and location of the meeting.

"Minister Morneau is working diligently to reach an agreement and will work to ensure that the positive and collaborative tone set last December continues in Vancouver," he said in an e-mail. "Most importantly, he will ensure that the goal of a safe, secure and dignified retirement for all Canadians stays top of mind as the negotiations continue."

Advocates for CPP reform argue that as fewer private-sector companies offer defined benefit pension plans – which provide guaranteed retirement income for life – the CPP should be enhanced to address this potential shortfall in retirement savings.

Critics argue that any plan to offer more generous benefits will involve mandatory increases in payroll premiums for workers and their employers, which could hurt employment during a time of sluggish economic growth.

Both sides of the debate are already lobbying hard on the issue.

The Canadian Labour Congress recently launched a $3.5-million national advertising campaign. The television ad shows a man receiving a watch as a retirement gift, which he then sells at a pawn shop late at night.

The Canadian Federation of Independent Business, meanwhile, has said that preventing a CPP expansion is its top priority, and the small-business lobby group regularly raises the issue in its meetings with government officials.

Canadian Labour Congress president Hassan Yussuff said in an interview that he's been talking with officials across the country and is optimistic that an agreement can be reached.

He argues that if CPP is not improved, taxpayers will ultimately be on the hook to cover the rising cost of the Guaranteed Income Supplement, which is a federal program connected to Old Age Security that provides retirement benefits to low-income seniors.

Mr. Yussuff said it appears from his conversations that Mr. Morneau may be able to get the required level of provincial support. "There's always been some naysayers in the group, but that's pretty narrow now," he said.