CARP members call for action on CPP, no more excuses, delays; could cost votes; Finance ministers meet in June






June 3, 2013

Toronto, ON: CARP members reiterate their call for CPP enhancement as promised in June 2010, rejecting PRPPs and government excuses. CARP members want federal finance minister, Jim Flaherty, to agree to CPP enhancement since the provinces legally required to agree have already said they support it. For these CARP members, CPP enhancement is a ballot box issue.

Canada’s federal, provincial and territorial finance ministers are set to meet again in June and CPP enhancement, deferred since June 2010 and again at their December 2012 meeting, should be on the agenda. CARP has sent an open letter to the Ministers.

CARP members in the weekend CARP Poll™ demonstrated their impatience with government inaction on pension reform to date. CARP members are reiterating their call for enhancing the CPP as the best way to actually help people save adequately for their own retirement. As before, CARP members are ready to make action on CPP enhancement a condition of their vote – for the benefit of future generations.

“While MPs, who have no pension worries, squabble about the travel perks of senators, who have no income worries either, ordinary older Canadians are worried about having enough to live on in retirement. CARP members reject the PRPPs and the government’s excuses and despite five years of delay and prevarication, are more convinced than ever that immediate action is needed and will make their demand for pension reform clear in the ballot box”, said Susan Eng, VP Advocacy for CARP.

“CARP members know that CPP changes will only help future generations, not themselves, and see CPP playing a critical role in preventing poverty among seniors – the whole point of a nation’s pension system. So even if the impact will not be felt for decades, they know that governments need to act now”, added Eng.

CARP members, experts agree on CPP; inadequacy of PRPPs

Since the poll’s release Friday, over 1,700 CARP members responded with precise advice:

  • Only 29% think PRPPs are the answer to Canada’s pension crisis; 71% either reject them [51%] or don’t know [20%]
  • 6 in 10 reject government’s excuse that a weak economy cannot withstand even modest employer contributions
  • 2/3rds want provinces to press the federal government to agree to CPP enhancement as a condition of proceeding on the PRPP legislation
  • 75% say enough Canadians support CPP enhancement for the federal government to consent
  • More than half [55%] of CARP members say that CPP enhancement is a condition of their vote; only a quarter [28%] would not set that condition, the rest are not sure
  • CARP members are concerned about poverty among seniors and want a substantial, not just modest, CPP enhancement to address it and their concern that the economy suffers if there are more low income seniors

Pension experts, think tanks and even a bank CEO have said that CPP enhancement is the best way to help people save adequately but the federal government and some provinces have clung to the PRPPs as the sole solution to under-saving and growing retirement insecurity. [Please see citations at end of release]

CARP members reject the government’s PRPPs as an adequate solution on its own. CPP enhancement was always seen as a necessary adjunct if not the only solution to Canada’s retirement insecurity.

Enough Provinces agree to change CPP; only Federal consent required

Many provincial finance ministers agreed on CPP enhancement but any amendment requires the agreement of two-thirds of the provinces with two-thirds of the population plus the federal government. In December 2010, both Alberta and Quebec vetoed such CPP reform. Throughout, Ontario made CPP enhancement a pre-condition of its support for PRPP legislation.

Significantly, the new Quebec government’s November 2012 budget declared its support for CPP enhancement which would have broken the log-jam and allowed CPP reform to proceed. This caused Finance Minister Flaherty to declare that he wanted unanimity before proceeding although his vote was the only one then [and now] legally required.

CPP Enhancement promised June 2010 – no action yet

In June 2010, the finance ministers finally acknowledged that Canadians were not saving enough for their own retirement and that governments had a role to play. They proffered the Pooled Registered Pension Plans and committed to considering a “modest” CPP enhancement.

Since then, federal PRPP enabling legislation has been enacted and provincial legislation has been tabled and in various stages of approval.

Despite repeated calls for action on CPP enhancement, with at least one province making CPP enhancement a pre-condition of its enacting provincial PRPP legislation, notably Ontario’s former finance minister, Dwight Duncan, no action has been taken to increase the CPP coverage or benefits, even “modestly”.

CARP has called for a universal pension plan [UPP] modeled on the CPP but not necessarily made part of the CPP. However, its essential elements – employer contributions, payroll deductions, large pooled risk fund, professional management and target/defined benefits – are the elements of CPP enhancement that are supported by CARP members and pension experts alike. When only PRPPs were on offer, CARP members saw this as an acknowledgement of the need to address retirement insecurity but always relied on even a modest enhancement of the CPP in order to materially improve the pension landscape.



CIBC CEO Gerry McCaughey

David Denison: CPPIB

Professor Jon Kesselman, Simon Fraser University
“Expanding the CPP is the best option for improving Canadian workers’ retirement income security; it can ensure essential results that the proposed Pooled Registered Pension Plan cannot achieve.”

Douglas D. Peters, former chief economist, TD Bank
“It is clear that increasing CPP contributions is by far the best way to improve pensions for Canadians. One would hope that all the finance ministers in Canada would heed this call for an improved Canada Pension Plan.” Star (Op Ed), “Public option best strategy to buttress pension system,” December 22, 2010

Dwight Duncan, Ontario Finance Minister
“I believe we should seriously consider building on the strengths of the CPP through a phased-in, moderate increase to retirement and survivor benefits.” to Canada’s Finance Ministers, June 10, 2010

Dr. Keith Horner – Institute for Research on Public Policy
“When we take the various plan features and effects into account, it appears that the greatest benefits to participants and to the economy would come from the introduction of a national DB plan, such as an enrichment of the CPP/QPP, provided that the scale of the new plan leaves most participants with room for individual choice in the level and timing of their saving.” (page 29) A New Pension Plan for Canadians: Assessing the Options, Institute for Research on Public Policy No. 18, July, 2011


READ CARP’s open letter to the Finance Ministers.


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.

For further information, please contact:

Sarah Park   416.607.2471
Media Relations, Policy Researcher and Coordinator
[email protected]

Michael Nicin   416.607.2479
Director of Policy
[email protected]

Pam Maher   416.607.2475
Communications coordinator
[email protected]