FINANCE ministers reached consensus on an agreement-in-principle to recommend a modest and balanced incremental enhancement to the Canada Pension Plan, starting in 2019 and phased in over seven years until 2025, B.C. Finance Minister Michael de Jong announced on Monday.
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The plan will increase the monthly contributions for someone making $55,000 per year by about $7 a month to be matched by employers, according to a release from the province of British Columbia.
Morneau said Quebec – which has its own pension plan – and Manitoba continue to be part of the process, despite not signing on to the agreement.
Sources familiar with the talks said doubters had concerns about the potential economic impact of boosting the CPP, even at the late stages of negotiations.
The pair has unabashed support from the government of Ontario, Canada’s most populous province, which has controversially pledged to create a separate pension scheme to “strengthen retirement security for Ontario workers” if agreement can not be reached on expansion of the CPP.
Ontario Premier Kathleen Wynne has been pushing for expansion.
4) Not every province has to have the CPP.
Those measures are covered through general tax revenues, meaning that workers today pay taxes to raise the incomes of poorer seniors. In fact, says Cross, some critics maintain that the push to expand the CPP is driven by an unspoken need to prop up public-sector pension plans a little longer.
Leitao put forward a proposal during the meeting that more selectively targets those Canadians who are the least likely to save in order to avoid putting an additional financial burden on low-income earners.
Even when confronted with the fact that expanding the CPP would mean smaller paycheques and higher payroll taxes for businesses, the same number – 75 per cent – supported expansion.
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.
The federal and provincial governments are looking at a possible increase in the $55,000 cap on annual maximum pensionable earnings, which would result in both higher premiums and increased pension benefits.
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The legislation, as now written, also states that any reforms can only be implemented three years after a federal-provincial agreement is reached.
