CARP Push for CPP Enhancement Reaches Ontario Legislature

Premier Wynne, Minister Sousa, Minister Sergio CARP CPP metting Dec 2013

Premier Wynne, Minister Sousa and Minister Sergio at the
CARP CPP meeting in Queen’s Park

On Wednesday December 11th, 2013, Ontario Finance Minister Charles Sousa put forward a motion in the Ontario Legislature, urging his colleagues to vote in support of Ontario’s push for CPP enhancements ahead of the December 16th Finance Ministers’ meeting at Meech Lake.

The motion wasn’t voted on, after the Progressive Conservative Opposition Whip, John Yakabuski, delayed the vote for a week, preventing the Ontario Legislature from passing the motion before this weekend’s crucial meeting of Canada’s finance ministers.

This motion follows the November provincial and territorial finance ministers’ meeting in Toronto in which the ministers agreed that something needs to be done to enhance the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) benefits. Unfortunately the Federal Government has repeatedly blocked progress on efforts to increase the CPP/QPP. Most recently, Federal Conservatives in the House of Commons voted down a similar motion to enhance CPP put forward by NDP MP, Murray Rankin.

Canadians depend on the CPP and QPP for retirement security and experts agree that the Conservatives’ obstruction on this issue could result in a financial crisis for many Canadians.

Though Premier Wynne’s motion was not voted on, this motion represents a strong step towards full provincial and federal support for CPP enhancements ahead of the December 16th Finance Ministers’ meeting. CARP’s advocacy on CPP was mentioned numerous times by both the Premier and Minister Sousa, acknowledging the fact that CARP members want action on CPP for furture seniors even though current retirees won’t benefit from increases.

Below you can find Premier Wynne’s remarks to the Legislature, the acting speaker, Mr. Ted Arnott’s, remarks as well as Ontario Finance Minister Charles Sousa’s support for the motion. Within their statements, both Premier Wynne and Minister Sousa recognized CARP’s ongoing call for CPP enhancements and supported CARP’s position.

Read more about CARP’s Queen’s Park meeting with Premier Wynne, Minister Sousa and Minister Sergio by clicking here.

The full Hansard report on the result of the CPP motion put foward by Premier Wynne can be found by clicking here. You can also find the transcript of Premier Wynne and Minister Sousa’s statements below.


 Ontario CPP Enhancement Motion

Hon. Kathleen O. Wynne: I’m very happy to be able to speak to this motion, and I’ll be sharing my time with the Minister of Finance. I will just say—and I’ll speak to this later—that the Minister of Finance, the minister responsible for seniors’ affairs and I had the opportunity to meet with CARP, the organization representing seniors across the country. I’ll be interested to share their perspective, but they are very supportive of this direction.

Since being sworn into office almost a year ago, I’ve been travelling across Ontario. I’ve been travelling to every corner of the province. I’ve been to almost every riding in Ontario, and everywhere I go, I meet hard-working men and women who are doing so much for their families. They are working hard to make sure that in the immediate term their families have what they need and that in the future they have what they need. I know that they’re facing challenges. One of those challenges that I have heard about and they have talked to me about is making sure that they can save for the future.

In October, I was lucky enough to visit the home of Tommaso Altrui and Serena Bird in Brampton. They have their own business and they’re expecting their fourth child. They are very energetic young people involved in the community and in their business, but like so many people in this province, they don’t have a company pension, so when they retire, they will depend entirely on their savings and their contributions to the CPP. They worry—so do I—that this will not be enough. They also talked to me about their employees; they are concerned for themselves, but they’re also concerned for their employees.

As the Globe and Mail noted recently, three out of four eligible individuals did not contribute anything to their RRSPs in 2010, despite their generous tax deductions. I think that’s important, because often what comes back when we talk on this subject is the notion that there are mechanisms; there are RRSPs. If we look at not contributing anything, that three out of four eligible people didn’t contribute anything in 2010, I think it’s an indication that there is an issue here. The burden of planning for retirement rests overwhelmingly on hard-working people like Tommaso and Serena. As government, I believe we need to do more to make sure they have the support they need as they get older. This is an issue that is confronting us at both the provincial and federal levels of government.

The Bank of Montreal recently released a study showing that more than half of Canadians are expected to retire with a mortgage. The fact is that many Canadians are unprepared for retirement, even as they continue to work hard and to contribute to the economy.

This is an issue that we need to address together. This is not an issue that can be dealt with in isolation from one another. It’s our responsibility to make sure the people of Ontario can retire securely with comfort, dignity and confidence.

Il est notre responsabilité de nous assurer que la population de l’Ontario puisse prendre une retraite assurée, dans le confort, dans la dignité et sans souci.

This is a social imperative; yes, it is that. But it’s also an economic imperative. If we don’t address this looming crisis, we’ll all have to contend with the consequences of that, of people not having access to the supports that they need, of people needing support after the fact, when there wasn’t action taken before their retirement.

This is why our government is taking action, Mr. Speaker. This is why we believe that it’s very important that we call on the federal government at this time to work with us. As the chair of this year’s Council of the Federation of Canada’s Premiers, I have been working with my provincial counterparts to advocate for an enhancement to the CPP.

When my fellow Premiers met in beautiful Niagara-on-the-Lake this past summer, this July, I made sure that this issue was on the agenda. My colleagues agreed that there is a need to consider options for enhancing the retirement income system, including the Canada pension plan, the Quebec pension plan and the pooled registered pension plans, the PRPPs. We agreed at that meeting that a modest, phased-in and fully funded expansion of CPP-QPP would increase retirement income for future retirees and that it’s consistent with the efforts to improve labour mobility and enhance labour market efficiency. Those are obviously concerns, Mr. Speaker.

Our finance minister has been working with his counterparts, too. But what we have said is that if an agreement on enhancing the CPP cannot be found, then we are prepared to move forward with a made-in-Ontario solution. That is the degree to which we feel that this is critical, Mr. Speaker.

I don’t think this should be a partisan issue. I hear mutterings from across the floor; I won’t call them heckles at this point. But I really believe that this is something that we all should be concerned about.

In fact, in our country’s proud history, we can see the demonstration that if we work together on this front, then we can make progress. When CPP was last in need of an overhaul, in the 1990s, as life expectancies continued to expand, federal and provincial governments worked together to return the system to a surer financial footing. I’m sure that members in this House will remember that and remember the degree to which there was collaborative action. We’ve done it before, and we can do it again.

I don’t believe that we have time to waste. I think that we can’t simply allow the federal government to reject a CPP enhancement without any indication of how they will work to address this serious issue.

I think it’s important to note that there is no one across the country saying that this isn’t an issue. There is broad consensus that this is an issue. I think the reality of that means that we need to find a way to move forward. An enhancement to the CPP can bolster retirement incomes in a way that’s fair, universal and efficient.

Une amélioration au régime de pensions du Canada peut augmenter les revenus de retraite de façon juste, universelle et efficace.

It promises good return on a stable income in retirement, it will help to protect our most vulnerable citizens, and it will encourage people to plan for their own future.

I reject the arguments of those who I believe wrongly characterize this planned savings as some kind of punishment, that there’s a punitive aspect to it. That is not what this is, Mr. Speaker. Thinking about the future and making sure that we’re all adequately prepared should not be something that we argue over, or an idea that diminishes or is put forward only for political gain. It is a chance for us to look at the future with confidence and, quite frankly, with vision. It allows us to stand together on an issue that will touch us all, and our children and our grandchildren. The population is aging, and we are making sure that we prepare our population for retirement and that that is our collective responsibility.


I want to commend CARP. As I said, the Minister of Finance and I and the minister responsible for seniors’ affairs had the opportunity to meet with representatives from CARP today, and there were representatives from across the country. There was a representative from British Columbia, from Nova Scotia, from Quebec and from Alberta, and they had come here specifically because they wanted to meet in advance of the Ministers of Finance from across the country getting together this weekend. I just want to note that they have done a survey of their members. They have strong support, and in fact political support, for this initiative. They noted today that their commitment to this goes to the parties that they will support in upcoming elections, because they believe that this is so important. Remember, these are people for whom this will not be a benefit. This will not have an impact on their retirement. These are people who are either into their retirement or about to go into their retirement, so this is a group that is advocating for future generations. I think, Mr. Speaker, they make compelling arguments.

Susan Eng, who is the vice-president of advocacy for CARP, says, “The politicians now have an opportunity to improve retirement security for a generation. But they have to take the first step now.” That is the position of CARP, and I think it is a compelling one.

I had the opportunity to meet with Prime Minister Harper last week. I raised this issue. I’ll continue to advocate on this issue in my capacity as Premier and as the chair of the Council of the Federation and in all of my interactions with my provincial colleagues. It is that important to us, Mr. Speaker, that we find a way to take action on this.

Our government has a plan to grow the economy and create jobs by investing in people. We’ve been clear that investments in infrastructure and the creation of a business environment that is dynamic are extremely important and are fundamental to our job creation plan.

Taking care of the people of Ontario, hard-working people like Tommaso and Serena and everyone like them, in their retirement is a major commitment that we are making, and that is why we’re calling on the federal government to work with us on this and to work across the country so that we can find a consensus to make sure that we can move forward and that we can ensure that retirement for the people of the province and the country.

The Acting Speaker (Mr. Ted Arnott): I recognize the Minister of Finance.

Hon. Charles Sousa: I am pleased to have the opportunity to speak to this motion in the House on an issue that will have a profound effect on all Ontarians and indeed all Canadians.

The Ontario government has recently introduced a three-part plan to grow our economy and create jobs, which includes investing in people, building modern infrastructure and supporting a dynamic and innovative business climate, as the Premier has just stated.

As part of our plan to invest in people, we want to help ensure that Ontarians and all Canadians can retire comfortably. Our government has been taking action over the last number of years with a multi-faceted approach to enhance the retirement income system. But we know that there’s more to do, which is why we continue to advocate for an enhancement to the Canada pension plan, known as CPP.

The CPP is the foundation of the nation’s retirement income system, and it offers tremendous advantages as a retirement savings vehicle. It provides benefits throughout the life of a retiree and helps ensure that people do not run out of money in their retirement. It operates at a low cost and has an excellent track record for investment.

Although this program has served generations of Ontarians well, we must make improvements now if we’re to ensure that today’s middle-income workers are able to save enough to ensure that they have sufficient income when they retire.

The maximum CPP retirement benefit for new retirees is just over $1,000 per month, or $12,000 a year. The percentage, however, of new beneficiaries receiving the maximum CPP retirement pension is only 6%. The average Ontarian is receiving just under $7,000 a year. That’s about 56% of the maximum benefit.

An enhancement to the CPP is critical to ensuring that Ontarians, particularly middle-income earners, have greater financial security in their retirement.

Recently, Premiers from across the country agreed to four objectives for enhancement to the CPP. These include:

(1) a fully funded enhancement that focuses on today’s workers;

(2) undertaking further analysis and evaluation of the short and longer-term effects on businesses, families and the economy;

(3) improving the retirement incomes of middle-income workers who are most at risk of having insufficient retirement savings; and

(4) protecting lower-income workers.

These objectives should inform the design of a CPP enhancement.

Some have raised concerns that a CPP enhancement would harm the economy. However, a plan to enhance the CPP would include a two-year notice period and adequate phase-in for contribution increases that would give businesses, workers and the economy time to adjust.

There is also a significant economic impact to this enhancement. Additional CPP contributions would be reinvested, both domestically and internationally, creating jobs and economic growth. And over the longer term, higher retirement income would contribute to a greater quality of life for retirees and a stronger economy.

A recent Boston Consulting Group study found that defined benefit pension plans such as CPP would reduce costs to taxpayers and, through the benefits they pay out, contribute tens of billions of dollars to the economy and to the coffers of governments across Canada. In other words, it has economic benefits now and reduces costs in the long term. That, Mr. Speaker, is a win-win.

Yet, incredibly, the federal government has resisted calls to initiate these enhancements and these discussions on CPP. They say that we can put off preparation for an enhancement to the Canada pension plan for another day. We strongly disagree. We don’t have time to waste. We must take action now, so that today’s workers have more security in their retirement tomorrow. We all pay a heavy price for the federal government’s inaction. Ontarians and all Canadians deserve leadership on this issue.

Ontario continues to work with other provinces and territories to find a Canada-wide agreement on CPP enhancement. Next week, at the federal-provincial-territorial finance ministers’ meeting, we will continue our discussions, and if the federal government continues to block provincial efforts to help secure a better retirement, we will move to implement a made-in-Ontario alternative. We will protect future retirees, protect today’s workers and invest in the people of Ontario.

Provinces across Canada have agreed that an enhancement to the CPP is necessary, and all agree and understand that we have a problem and an issue. Even the members of the federal government recognize that a problem exists. We are at the table, encouraging the federal government to ensure that we resolve that problem for the benefit of our future generations, and that is what seniors at CARP did today. They’re not looking for themselves; they’re looking for the benefit of our future, as we all should be.

© Ontario Legislature Hansard Transcript