New voluntary pension plan most feasible: minister

“The first priority for me is to get as broad a pan-Canadian plan as possible, and if we can achieve that with a supplemental plan, then great,” Hansen told the Canadian Press.

In the wake of December’s ministers’ meeting in Whitehorse, provincial and federal officials maintain that no reform options are off the table. However, the adoption by the ministers of economist Jack Mintz’s report—which concluded that Canada’s pension system is far from facing a crisis—seems to have taken some of the urgency out of the debate.

Last week, Hansen released a previously confidential paper refuting the findings of the Mintz report and made a fresh appeal for reform. The paper identified two ideas as the most promising options: the creation of a voluntary supplemental tier to the CPP, and expanding the CPP into a more comprehensive and mandatory plan. Private-sector proposals were dismissed.

Hansen now acknowledges that an expansion of the CPP may be difficult for some employers to deal with in a time of economic uncertainty and that the voluntary option would be the most feasible sell.

“If we were to try to implement this today, we would get great pushback from the private sector, who basically could not afford an increased burden of an increased payroll tax,” he told the Canadian Press. “If it’s a voluntary program then that helps mitigate that problem.”

Still, Hansen has not backed down from his 2009 ultimatum to the federal government regarding the pace of pension reform. The governments of B.C. and Alberta, frustrated at the lack of federal leadership on the issue, have threatened to create their own plan and invite the other provinces to join in lieu of a better option.

Known as the ABC Plan, it envisions a privately financed, defined contribution plan that will be available to employers, employees and self-employed people on a voluntary basis. Hansen recently stated that in the event the plan is created, all Canadians would be welcome to participate.

The federal and provincial governments are currently organizing a series of cross-country consultations to identify pension reform options, and a decision-making meeting is expected in May.

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