CARP Open Letter calls on Finance Ministers to enhance CPP, cap PRPP fees and fund Home Care


13 December 2011

CARP Open Letter calls on Finance Ministers to enhance CPP, cap PRPP fees and fund Home Care; Finance Ministers meet December 18-19

Toronto, ON: CARP issued an open letter to the Finance Ministers in advance of their meeting this weekend in Victoria calling on them to overcome their jurisdictional differences to focus on enhancing the CPP, improving the PRPPs with fee caps, reliable returns and investor protection and taking concerted action to develop and fund a national home care and caregiver strategy.

The federal, provincial and territorial finance ministers meet in Victoria on December 18th and 19thand both pension reform and the health accords are anticipated to be on the agenda. CARP issued the attached Open Letter to the finance ministers calling on them: 

  • to revive discussions on enhancing the CPP which were sidelined by objections from Quebec and Alberta,
  • to impose fee caps and improve the investor protection and dependability of the proposed Pooled Retirement Pension Plans [PRPPs], and
  • to develop and fund a national home care and caregiver support strategy as a priority in the upcoming Health Accords.

“The political landscape has changed dramatically since the PRPPs were first announced and the CPP-enhancement portion sidelined. CARP members were disappointed last December when the Finance ministers announced that they could only achieve consensus on moving ahead with PRPPs. They should revisit getting a consensus on enhancing the CPP along with better safeguards on PRPPs. We should not be satisfied with the least of the options”, said Susan Eng, VP Advocacy, CARP.

CARP calls the PRPPs “just one more savings and investment vehicle in an already crowded and under-utilized market and not a true pension plan that is necessary for retirement security” since there is no proposal to regulate fees and the proposed defined contribution arrangement does not offer any certainty as to retirement income.

To provide adequate retirement security, CARP says that “the PRPPs should be improved to include:

  • legislated fee caps
  • open competition that allows public sector pension fund managers to administer them
  • requirement of target or defined benefits, and
  • a fiduciary structure that protects the interests of investors and retirees”

“Although there has been a proper focus on lowering  management fees which can erode investment returns, the real concern is whether the new vehicle will provide a predictable and adequate retirement income. The PRPPs provide neither and should”, added Eng.

The CPP has successfully provided an affordable and reliable source of retirement security for the broadest reach of Canadians. However, the level of CPP benefits alone is inadequate and CARP has called for increasing CPP coverage and benefits.  

To counter the criticism that increasing CPP premiums to pay for increased CPP benefits would be “job killers”, CARP offers a rough calculation [attached] of the dollar amounts that would be required to increase CPP benefits by a modest 10 percent. Subject to verification by finance officials, CARP estimates that employers and employees would each pay $45 more per month and for a low income earner, $18 more per month, which CARP argues is not a “job killer”.

The Health Accords are also on the table and CARP is calling for “a comprehensive national home-care and caregiver support strategy with adequate stable funding and accountability to fulfill the promise of aging at home including:

  • Establishing a new designated federal home care transfer to guarantee a basic level of home care services to all Canadians wherever they live;
  • Exploring the feasibility of a national long term care insurance scheme or other method of stable funding for continuing care;
  • Developing and investing in programs that allow more Canadians to age at home; 
  • Supporting informal caregivers, by:
    • Providing targeted financial support, especially to caregivers providing heavy care;
    • Providing workplace protection and work-leave;
    • Integrating support for informal caregivers with the formal health system, through training and respite care.”

“CARP Polls indicate consistently that older Canadians want to stay in their own homes as long as possible even with medical and mobility challenges. Some 2.7 million Canadians already care for a loved one at home. But they can’t do this alone and if governments act now, they can realize the potential of diverting billions of dollars of demand from the formal health care system. Good health and social policy is also good fiscal policy”, added Eng.

CARP is a national, non-partisan, non-profit organization committed to advocating for a New Vision of Aging for Canada, social change that will bring financial security, equitable access to health care and freedom from discrimination. CARP seeks to ensure that the marketplace serves the needs and expectations of our generation and provides value-added benefits, products and services to our members. Through our network of chapters across Canada, CARP is dedicated to building a sense of community and shared values among our members in support of CARP’s mission.

To read CARP’s Open Letter, click here

For further information, please contact:

Michael Nicin 416.607.2479

Policy Development and Government Relations  

[email protected]


Susan Eng

Vice President Advocacy

[email protected]

CARP, A New Vision of Aging for Canada

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