Posted: Thursday, 22 December 2011

The Canadian Labour Congress is disappointed that the provincial finance ministers meeting recently in Victoria did not reach a consensus on introducing improvements to the Canada Pension Plan and Quebec Pension Plan.

We expected the pensions issue to be prominent on the agenda and we did a good deal of lobbying and communications work to build support for our proposal to enhance the CPP/QPP. But Jim Flaherty, the federal finance minister, shocked everyone by dropping on the table, without warning, a unilateral proposal about future healthcare funding. That left provincial ministers scrambling to respond.

The pensions issue was discussed as well but there was no agreement on it. We do know, at the least, that ministers will meet again in June 2012 and that their officials will continue to work on defining what a “modest” increase to the CPP would mean.

We clearly have much work to do at the provincial level, particularly in B.C., Alberta and New Brunswick. The Alberta and Saskatchewan governments will need to understand and appreciate the costs of doing nothing. We will have to continue working with the FTQ to win over the government in Quebec.

The pensions issue will not go away. Canadians are facing a retirement income train wreck and our governments have to do something about it. People cannot save enough for retirement and we are going to see growing poverty among retirees. From a public policy perspective, we should also think hard about the tax bill that today’s young workers will face as more and more retirees are forced to draw on taxpayer-funded OAS and GIS benefits.

Despite the lack of progress in Victoria, we have made headway in drawing support to our position. The CLC facilitated an open letter from six of Canada’s most prominent pension experts just prior to the Victoria meeting. It called for an expanded CPP as the best way to deliver retirement security for Canadians. The letter received a good deal of attention.

On the other hand, there are growing doubts being expressed about Ottawa’s pet proposal for PRPPs. Even the C.D. Howe Institute has worried out loud that if it is not mandatory for employers to provide PRPPs in workplaces, they will not be picked up. There are already hundreds of billions of dollars in unused RRSP room that is available to tax filers. What is the point of providing yet another voluntary pensions’ instrument?

We have a great deal of work to do in convincing the provinces to get on side with our proposal to enhance the CPP/QPP. The campaign is well on its way but it is far from over. We are in this for the long haul. The CLC will continue to mobilize on this issue in anticipation of the next finance ministers meeting in 2012.