The Canadian Press
Andy Blatchford
Jordan Press
OTTAWA—Finance ministers in Canada’s two most populous provinces are sending mixed signals about whether they expect to hammer out a deal with the federal government next week on how best to enhance the Canada Pension Plan.
Quebec Finance minister Carlos Leitao said yesterday he expects Monday’s meeting in Vancouver to boil down to one or two options, but that a final deal is unlikely since they’ve already agreed to study those proposals until December.
But Leitao’s Ontario counterpart, Charles Sousa, is sounding much more optimistic—as well as a little conciliatory.
“I’m hoping that we can actually have a deal by next week,” Sousa said in an interview.
“I’m very encouraged and hopeful that we will have an agreement around the table about the degree of CPP enhancement, the timing of CPP, and the ability to move forward with substantive benefit, as we’ve outlined here in our province,” he noted.
Federal Finance minister Bill Morneau has said he wants to see a deal to expand CPP completed by the end of the year, but talks now are in high gear in the hopes of a preliminary agreement much sooner.
The governing Liberals made CPP reform a marquee promise during last year’s election campaign. But since winning the October vote, they have refused to provide specific details about their own vision for how it should happen.
Leitao said there is a willingness among provincial and territorial finance ministers to create a national program, but cited disagreement that he said still persists about how best to proceed.
He noted the scenarios still on the table include one that would beef up the CPP program across the board and another that would target middle-income earners.
For example, Leitao said contributions could be increased on income levels between $25,000 and $80,000 to strengthen retirement security for middle earners.
Quebec, however, has concerns that a broad-based increase to CPP contributions would have considerable impact on workers and employers because they would be called upon to fund the change through payroll taxes.
“We think that there is no crisis regarding public pensions in Canada,” Leitao said yesterday in an interview.
“But yes, we are willing to look at ways to improve the current system.
“But any such improvement . . . targeted to a certain income group should be relatively modest and put in place gradually,” he stressed.
Quebec’s support for CPP enhancement is crucial for the federal government as it tries to get enough provinces to back a change to the system.
For the last six months, provincial and federal officials have reviewed and analyzed potential changes to the federal plan to see what is palatable in terms of an increase in benefits, an increase in premiums, and where to set the bar on the income cut-off for paying CPP premiums.
But reaching an agreement is not easy.
Making changes to CPP requires the consent of seven provinces representing at least two-thirds of the country’s population—a higher bar than the amending formula for the Constitution.
That math also makes Ontario’s consent a necessity for any changes to occur—and ensures it, Quebec, and B.C. are central to the talks reaching any sort of consensus.
Prime Minister Justin Trudeau and B.C. Premier Christy Clark were scheduled to meet today in Burnaby.
Earlier yesterday, Ontario Premier Kathleen Wynne said she is willing to agree to an expansion of the CPP if the value of benefits almost equals the amount of her proposed provincial pension plan.
Wynne said she wants to see CPP benefits increase to be about two-thirds of what has been promised under her government’s proposed pension scheme, the Ontario Retirement Pension Plan.
She didn’t put a firm dollar figure to her request, but signalled Ontario wanted to see the maximum yearly CPP payouts almost double to about $21,000 from roughly $13,000.
