While supporters of an enhanced Canada Pension Plan were disappointed with the results of a recent
finance ministers meeting, they should take solace in the change of tone from the federal minister, Jim Flaherty.
Last year, in response to opposition from Quebec and Alberta in particular, Flaherty quashed all hopes of enhancing the plan, which would be funded with premium boosts for employers and employees.
Instead, the government introduced the Pooled Retirement Pension Plan, a voluntary, privately run pension program aimed at small businesses, their employees and the self-employed. That plan was OK as far as it went, but it will only help a few people who may face a savings crisis in their retirement.
According to the Canadian Labour Congress's Ken Georgetti, a vocal advocate for an enhanced CPP, 60 per cent of workers have no workplace pension and one-third of Canadians between the ages of 24 and 64 have no personal retirement savings.
"If the government will not allow workers and their employers to provide for decent pensions through the CPP, future taxpayers will have to spend billions of dollars more than they do now in social programs for retirees who will be living in poverty," Georgetti warned.
While Flaherty and the ministers didn't agree to a CPP boost yet, they did agree to consider the issue when the economy improves and asked for a report on ways to do that at their next meeting in June.
For Flaherty, that's almost an about-face from his position late last year.
Business groups and some provinces have protested the idea of increasing CPP premiums. But more provinces favour it. Former B.C. premier Gordon Campbell was all for enhancing the CPP, although his successor, Christy Clark, has stayed quiet.
It's not a bad idea to wait for the economy to strengthen a bit. Enhanced premiums could be phased in. But CPP reform needs to happen. It's the best way to avoid a crush of unprepared retirees.
Premium increases would be a case of short-term pain for long-term gain. Deep down, even Flaherty recognizes that fact.
- City Editor Pat Bulmer