Flaherty proposes raising Canada Pension payroll premiums

Ontario hopes clear decisions will come out of the PEI meetings to counter criticism that pension talks have dragged on too long, but that may be a challenge. Nova Scotia finance minister Graham Steele told the Globe on Thursday that he is not taking a firm position and wants to hold provincial consultations before committing to anything.

“This meeting really is only a step on the road,” he said. “I’m not expecting any big decisions… If there’s going to be any changes involving the Canada Pension Plan, we have to make sure that we get it right, and that necessarily takes time.”

In March, Mr. Flaherty released a consultation paper on pension reform that laid out three options. The first was a voluntary, government-sponsored pension plan – possibly as a supplemental offering by the CPP. The second was to expand the CPP in its current form by increasing premiums and benefits. The third option would be to amend tax rules to make it easier for the private sector to create large defined-contribution plans. This would primarily benefit small businesses and the self-employed, categories where many workers often do not have pensions.

Several independent reports were released Thursday in an attempt to influence the debate in PEI..

The TD Financial Group said Canadians making $30,000 to $80,000 are most “at risk” of not saving enough to maintain their current standard of living. It concludes that smaller changes should be made now – including allowing Canadians to contribute more to registered savings plans and tax-free savings accounts. According to TD, decisions on the larger options should be made soon, but further research is needed.

The research team at BMO urged ministers on Thursday to consider raising or eliminating the age limit of 71 for contributions to RRSPs. Meanwhile, the Canadian Federation of Independent Business stated that a survey of its members found 71 per cent are opposed to a proposal advocated by unions that would double CPP premiums and benefits.

© The Globe and Mail

Keywords: pension