Federal Finance Minister Jim Flaherty spent Monday selling the merits of a beefed-up Canada Pension Plan (CPP) to his provincial counterparts at the ministers’ meeting in Lakeside, P.E.I. And from the look of early reports, it seems he won them over.
Flaherty told reporters that a majority of provincial finance ministers were on board with his plan to gradually increase CPP benefits and that they would work toward that goal as a group.
“We were not unanimous, but certainly the substantive majority view was that we should proceed,” he said.
In order to reform the CPP, Flaherty needs the support of seven out of 10 provinces.
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At least two provinces voiced opposition to the move, according to Flaherty. He declined to identify them, but Alberta has been vocal in its opposition to the idea, preferring to allow the private sector a chance to bring about positive change.
Ministers will now study the implications of implementing such changes in anticipation for their next meeting in the fall.
The talks were energized last week by a last-minute alliance between Flaherty and Ontario Finance Minister Dwight Duncan, who agreed on fundamental issues, including an expanded CPP.
Flaherty’s plan envisions enhanced benefits to be paid for by contributions and investment returns over a person’s working career, as opposed to the existing CPP that pays benefits from contributions made the same year. The current reserve fund managed by the CPP Investment Board will be used to cover some of the increased costs associated with the retirement of the boomer generation.
The current focus on pension reform seems to have taken the air out of calls for the creation of a supplemental pension plan, previously championed by British Columbia and Alberta. There has been no mention of such a plan by ministers in the run-up to Monday’s talks.
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