CHARLOTTETOWN — The federal finance minister says he hopes to come away from a meeting with his provincial counterparts with an agreement on how pension reform in Canada should proceed.
Jim Flaherty and the provincial and territorial finance ministers are currently huddled at a beach resort on Prince Edward Island.
The meeting comes amid fears that a growing number of people — especially the middle class — aren’t squirreling enough cash away for their retirement years and will be faced with a reduction in their standard of living.
Flaherty is proposing a number of initiatives including what he calls a modest and gradual increase in Canada Pension Plan payroll premiums.
“I’ve made it clear from the beginning that the government’s first principle is do no harm,” Flaherty said Sunday. “We have a Canada Pension Plan that is the envy of the world and it is actuarially sound for the next 75 years.”
There is growing debate over how much CPP benefits should be increased.
The country’s main small-business lobby group, the Canadian Federation of Independent Business, is dead set against anything that would increase CPP premiums.
But Canadian Labour Congress president Ken Georgetti wants the premiums doubled.
“Doubling would ensure that every Canadian has a base pension that would put them above the poverty line,” he said Sunday in Charlottetown. “It would only cost around six cents an hour ... about a cafe latte a week to have pension security for every Canadian and I think that’s not too much to ask.”
But Flaherty said he doubted the provinces would agree to doubling the CPP, and said such a jump could hurt the economy and place a heavy burden on businesses and people who are self-employed.
“If you’re self-employed you have to play the employer’s part plus the employee’s part so the percentage becomes rather dramatic when you get into that range,” he said.
Flaherty said no one should expect changes any time soon.
“We’ve taken two years to listen,” he said. “We can take more time to make sure we get this right and ensure that we do no harm.”
Flaherty has also told the provinces that financial institutions should be given the regulatory freedom to provide more pension options at low cost, especially to self-employed people and small businesses.
But Georgetti pans that idea, saying that the banks and insurance companies have had the chance to step up to the plate, but haven’t done so.
He said it’s up to the finance ministers to take action now.
“They should put their foot on the gas pedal because we’re in a crisis now and it’s going to get worse unless they do something,” he said. “They should have done something 20 years ago, so Minister Flaherty has got a lot of catching up to do.”