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Pensions could play key role in potential election

|Written By Andi Balla

Pension reform and the debate over enlarging the Canada Pension Plan could be a key factor in triggering an election as Parliament mulls the proposed budget unveiled this week.

And it is not so much what the proposed federal budget says about pensions as what it doesn’t say.

Delivering his budget speech this week, federal Finance Minister Jim Flaherty mentioned the continued government support for the pooled registered pension plans on which Ottawa and the provinces are supposed to come to a final agreement in April. The model would give more access to registered pension plans for Canadians whose employers don’t offer such programs by allowing several organizations and individuals to voluntarily pool their resources.

But there is nothing in the budget about mandatory contribution increases to the CPP. Flaherty had previously said the government “should consider a modest, phased-in, and fully funded enhancement to defined benefits under the Canada Pension Plan in order to increase savings adequacy in the future.”

The absence of any mention of CPP changes in the government plan puts the minority Conservative government at direct odds with the NDP, which has made increasing the CPP a key political goal.

NDP leader Jack Layton says his party sees “phasing in a doubling of CPP/QPP benefits, in consultation with the provinces,” as the most cost-effective way to make sure Canadians save enough for retirement.

Of course, even if there was an agreement in Ottawa, the CPP can only be reformed with the support of provinces representing two-thirds of the Canadian population. And like many things in Canadian politics, there is a geographical split in support, too. Ontario supports it. Alberta is against it.

  • Jean-Pierre Laporte
    Also, while the Tories push for a private sector solution (the PRPPs) and the NDP advocates for a pure public-sector solution (doubling of existing CPP benefits), the Federal Liberals have quietly proposed a middle of the course solution that allows for private sector management of assets, but offers defined benefits from a public plan, the Supplemental CPP account.

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