Those measures are covered through general tax revenues, meaning that workers today pay taxes to raise the incomes of poorer seniors.
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The political arguments about what to do with CPP boil down to whether to have an across the board change that would affect all workers and employers, or target workers who are the least likely to save. Will they pay attention? In recent years, their Conservative predecessors had opposed a mandatory CPP enrichment.
3) Expanding the CPP has come down to one of two scenarios.
Federal research has suggested that group tends to be under the age of 30, earns between $55,000 and $75,000 (although some estimates are higher), and either doesn’t save enough or lacks access to a workplace pension plan. One study from February 2015 suggested 17 per cent of households were not saving enough for retirement.
Fortunately, it appears that several key provinces are coming around to the idea of strengthening the CPP, even though differences still exist on how best to do that. Quebec has its own version. Ontario Premier Kathleen Wynne has pushed hard for a broad-based enhancement that would increase benefits along the lines of her government’s Ontario Retirement Pension Plan.
Even provincial finance ministers have publicly questioned the need for CPP reform at this time. Nevertheless, the private sector must continue to play an important role in the retirement saving space as employees and employers will benefit from the new solutions and the innovation and the flexibility they help drive. If the answer to both is yes, it could let everyone claim a political win and move off the political hot seat for now.
If approved by the provinces, a seven-year phase in period would begin in January with premiums raised moderately over time to provide greater payouts for Canadian pensioners.
Opposition critic Danielle Chartier says the existing plan will be ineffective for those who have no other means of support in retirement.
Reforming the pension system needs the support of at least seven provinces representing two thirds of the country’s population, which gives Ontario an unofficial veto over any decision.
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The federal government intensified its lobbying efforts over the final days and hours of ongoing meetings in Vancouver as it tried to attract support from enough provinces to ensure a CPP upgrade, said sources with knowledge of the talks.
