Thursday, April 24, 2014

Flaherty blocks CPP reform

MEECH LAKE, Que.—A federal-provincial meeting on Canada Pension Plan reform broke up in recriminations yesterday after several provincial ministers accused Finance minister Jim Flaherty of blocking efforts to enrich the plan—or even agreeing to further study.
Ontario Finance minister Charles Sousa, who previously had threatened to go it alone, said Flaherty and Kevin Sorenson, the minister of state for finance, left him no choice with their intransigence.

The federal ministers told reporters after the meeting there had been no consensus.
But Sousa and ministers from P.E.I., Quebec, and B.C. all said Ottawa was the only voice against proceeding to consultations and study.
“I’m very disappointed that they used stall tactics in order to ensure that CPP enhancement wasn’t even considered at this point in time,” a visibly-angry Sousa said.
“It shows to me that unilateral decisions are being made without consultations with the provinces.
“Ontario will go it alone,” he vowed. “We will look at alternatives as we must to protect the interests of our citizens.”
Sousa also accused Ottawa of cutting $640 million in transfer payments to Queen’s Park in order to try to balance the budget on “the backs of Ontarians.”
P.E.I. Finance minister Wes Sheridan, who has championed a specific proposal to enrich the pension plan, also made no attempt to hide his emotions, saying he needs 24 hours to consider his options—and suggesting he may join Ontario.
“At this point, we need to reconsider where we go from here,” he remarked.
“A made-in-Ontario solution may involve every province of Canada.”
For B.C.’s Michael de Jong, the day’s outcome meant the concept of CPP enhancement was over in the federal-provincial forum, although provinces may continue discussions on their own.
CPP reform requires approval of seven provinces representing two-thirds of the population, as well as a green light from Ottawa.
While several options have been floated, most involve a three- to 10-year phase-in period, where premiums are raised to pay for a boost in benefits down the road, with the idea that young Canadians today will be ensured an adequate standard of living when they retire.
Currently, employees and employers split the 9.9 percent contribution rate on pensionable earnings up to $51,100.
That pays out to a maximum benefit of $12,150 a year, although the average payment to current retirees is about $7,200.

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