Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday June 21, 2016
CPP reform to dominate finance ministers meeting in Vancouver
The federal finance minister says revamping the Canada Pension Plan is critical to ensuring that future generations of Canadians can retire in dignity, no matter the state of their finances.
Bill Morneau joined his provincial and territorial counterparts in Vancouver today to discuss reforming the national pension program over concerns that some Canadians will struggle financially come retirement.
The pressure is on to reach a deal as Ontario’s plans to develop its own pension program are well on their way, though the province’s finance minister says his preference would be for a national plan.
Ontario wants a deal now, but Saskatchewan and B.C. have suggested the economic conditions aren’t right for a change that’s likely to lead to an increase in the premiums that come off workers’ paycheques.
That premium hike is why some critics of the expansion call it a payroll tax, a common refrain from the Opposition Conservatives who oppose an across-the-board expansion of the program.
The ministers could agree to that or to more selectively target those Canadian workers who are the least likely to save.
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.
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.
Resolving the issue could be harder than changing the Constitution. A change to the CPP requires provinces representing two-thirds of the population; a constitutional amendment needs seven provinces representing at least half. (Source: CBC News)