“It is tremendously disappointing to see that finance ministers are putting Canadian wages, hours and jobs in jeopardy and willfully moving to make an already shaky economy even worse”, said CFIB president Dan Kelly.
Advertisement
“The middle income earners are going to be paying for it whatever happens”.
The scheme, if it goes ahead, would go into effect in 2019 and increase contributions for a typical worker earning about $55,00 by $7 a month and employers would match those contributions (the hated payroll tax).
Once the plan is fully implemented, the maximum annual benefits will increase by about one-third to $17,478. The CPP is run jointly by both levels of government and changes require the support of seven of 10 provinces representing two thirds of the Canadian population.
Along with Quebec, Manitoba didn’t sign onto the deal on Monday.
“Quebec is in a different situation”, he said. That’s when the new CPP plan will be finalized. Ontario’s proposed pension plan will be mandatory, unlike Saskatchewan’s, but it is aimed at workers without a private pension, meaning it isn’t universal like the QPP.
“It wasn’t easy. We had a lot of deliberations… a lot of discussions”, Sousa said of the negotiations with his federal, provincial and territorial counterparts in Vancouver.
Seventy-five per cent of respondents in a new Angus Reid poll say they support growing the CPP either “significantly” or “moderately”, while 22 per cent said it should be left as is.
“We think this strikes the right balance in that regard”, de Jong told reporters after the announcement.
Provinces will have until July 15 to officially sign on to the agreement before it becomes formalized.
Quebec Finance Minister Carlos Leitao said in an interview he will raise QPP premiums according to the CPP deal.
The source did not provide details of the agreement in principle.
The sources also suggested Prime Minister Justin Trudeau himself was involved in the extra effort.
Heading into the federal-provincial meeting, it was still unclear whether Ottawa would piece together the minimum required provincial support for change. Saskatchewan, for example, did not support CPP enhancement. “While economies across Canada continue to face challenges from the global economic downturn, this proposal appears to be affordable and appropriate, as the modest increases in contribution rates will be phased in over seven years starting in 2019”.
Federal Finance Minister Bill Morneau has argued that enhancing the CPP is critical to ensuring future generations will be able to retire in dignity, no matter the state of their finances.
One of the biggest arguments over CPP expansion was whether it would benefit lower-income Canadians given that higher CPP benefits could lead to a reduction in the Guranteed Income Supplement, which is aimed at seniors with low incomes.
Opposition critic Danielle Chartier says the existing plan will be ineffective for those who have no other means of support in retirement.
Advertisement
Another option for the finance ministers is to target workers who are the least likely to save. This formula gives the most populous province – Ontario – an unofficial veto over any decision.
