Conservatives to explore expansion of Canada Pension Plan

Click here to readConservatives to explore expansion of Canada Pension Plan” – The Canadian Press for CTV News, May 26, 2015

OTTAWA — In a sudden about-face, the Harper government said Tuesday it’s thinking about giving Canadians the option of hiking their contributions to the Canada Pension Plan — a measure that would help them boost their retirement savings.

With an election date less than five months away, the move looked like a surprise effort by the Conservatives to wrestle some ground away from their political foes.

The Tories have long opposed expanding the government-managed pension plan — an idea supported by the NDP — but Finance Minister Joe Oliver told the House of Commons that they intend to consult experts and stakeholders on the matter this summer.

The government’s goal: explore ways that would allow Canadians to make voluntary add-on contributions to the CPP.

“We are open to giving Canadians the option to voluntarily contribute more to the Canada Pension Plan to supplement their current CPP retirement savings,” said Oliver, who offered few details and did not speak to reporters after question period.

People need choices when it comes to their retirement savings, rather than being forced to make mandatory payments, Oliver said. The government, he added, aims to build on other voluntary savings options already available, such as pooled, registered pension plans and tax-free savings accounts.

The subject of retirement income is expected to be a weighty election issue this fall and the Tories’ opponents lined up to portray Tuesday’s change of heart as crass political opportunism.

“They’re trying to scoop up a few votes of those that are concerned about their pensions,” said NDP finance critic Nathan Cullen.

“I don’t know if they’re actually going to do it. If they were going to do it, one would’ve imagined they would have done it already.”

The NDP has long called for a mandatory expansion of the Canada Pension Plan to help Canadians save for retirement.

Liberal finance critic Scott Brison accused the Tories of swiping the idea of voluntary expansion from his party’s 2011 election platform. He said the timing of the announcement — on the “eve of an election” — shows the move was more about winning votes than good policy.

“The Conservatives criticized it and have criticized it ever since,” Brison said of the Liberal proposal.

Tuesday’s news came as a surprise to those who have long been calling for it.

“It’s, first of all, a 180-degree turn from what they had been saying for the last five years,” said Susan Eng, vice-president of advocacy for the influential seniors group CARP.

She did, however, describe the change as “sort of like a half-measure.” Eng said internal polls of her organization’s members have shown that 80 per cent of them support mandatory expansion of the pension plan.

The concern is that people aren’t disciplined enough to save enough for retirement on their own; higher mandatory pension contributions would help them get there, she said.

The long-running debate about the Canada Pension Plan has also spilled into the provinces.

Last month, Ontario — keen to see the federal plan expanded — introduced legislation to create its own provincial plan for more than three million people who do not have a workplace pension.

Eng said the federal government’s move may have been prompted by the recent NDP election win in Alberta, which may provide the minimum level of support from the provinces — two-thirds of the provinces representing two-thirds of the Canadian population — to allow modifying the plan.

Members of the Harper government have expressed interest in expanding the Canada Pension Plan in the past.

In 2010, then-finance minister Jim Flaherty proposed a “modest” mandatory CPP increase and rejected the idea of a voluntary one.