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Provincial and Territorial Ministers of Finance agree on conditions to enhance CPP

“Hopefully this strong consensus amongst provincial and territorial Finance Ministers to enhance the CPP will be enough to get federal Finance Minister Jim Flaherty to reconsider the federal government’s position”: James Clancy.

Ottawa (05 Nov. 2013) – The labour movement's three-year campaign to convince federal, provincial and territorial governments to expand and enhance the Canada Pension Plan (CPP) was given a major boost this past Friday. Federal, provincial and territorial finance ministers reached an agreement on the need to enhance the CPP as a sensible approach to improve the retirement security of future Canadian seniors.

Finance Ministers agree to conditions to expand and enhance the CPP but no consensus on final changes

After their day-long meeting in Toronto, the Ministers of Finance issued a joint news release stating that they “took an important step forward today by finding common ground, including agreement on objectives that would underlie options to enhance the CPP.”

The Ministers agree on four conditions that must be met in any plan to expand and enhance CPP

  • Be responsible and fully funded and focus on today's workers
  • Moderate the short-term effects on businesses, families, and the economy
  • Improve the future retirement incomes of middle-income earners
  • Protect lower-income workers.

They, however, did not reach any consensus on what a CPP enhancement would look like. 

The Ministers will report back to their respective premiers on their discussion on the objectives and possible options to enhance the retirement income system.  The hope among provinces is that the ministers can reach an agreement on the matter when they sit down with federal Finance Minister Jim Flaherty in December.

Provincial hold-outs - Alberta and Québec - have agreed to consider improvements but federal government still proposing a weaker, voluntary option 

Previous attempts over the past three years by the provinces to reach a deal on enhancing the CPP failed because of lack of support from Alberta and Québec.  Both provinces have now changed their positions and have agreed to consider proposals to improve the universal public pension plan. 

Although the federal government has never completely rejected the notion of expanding the CPP, it has thrown up roadblocks on the path to improved CPP benefits.  The Harper government has been promoting a far less superior option, known as the Pooled Registered Pension Plans (PRPPs) program.  PRPPs are nothing more than a new version of an existing and ineffectual retirement savings vehicle, Registered Retirement Saving Plans (RRSP). 

Like RRSPs, PRPPs will be voluntary and managed by the financial services industry that will make millions of dollars in profits by charging expensive administration fees.

Experts say best solution to providing Canadians with adequate income in retirement is to expand the CPP

Commenting on the deal reached last Friday, James Clancy, National President of the National Union of Public and General Employees (NUPGE) stated that “hopefully this strong consensus amongst provincial and territorial Finance Ministers to enhance the CPP will be enough to get federal Finance Minister Jim Flaherty to reconsider the federal government’s position.

“There's a growing consensus among policy experts and Canadians in general that the best solution to providing Canadians with adequate income in retirement is to expand the Canada Pension Plan. Our CPP is the envy of the world: it’s secure, funded on a sound basis and well managed by professional staff independent of government. The only problem with the CPP is that benefit levels are way too low to provide Canadians with adequate income security in their retirement.”

More information:

NUPGE: Top ten reasons to expand the Canada Pension Plan

Pensions and Retirement Security

NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE