Jim Flaherty and Wes Sheridan
As P.E.I. Finance Minister Wes Sheridan gets ready to make another push for his plan to increase Canada Pension Plan premiums, he has strong words for those saying it would be a job killer.
“All of this malarkey that they’re putting out there now about it being a job killer and a payroll tax, they have to go back and look at what the facts are,” he said.
Sheridan heads to Meech Lake, Que. this weekend to meet with his provincial and federal counterparts to discuss several topics, the foremost of which will be CPP enhancements.
The ministers meet Sunday night for a private dinner and get into furthers discussions Monday.
Sheridan’s plan calls for an increase in CPP premiums that would lead to higher payouts for retirees, which he says is all necessary because people aren’t saving enough for retirement.
Any change would require approval from at least two-thirds of the provinces with two-thirds of the country’s population, as well as federal support.
That support has been elusive, but Sheridan said he hopes that on Monday they will all agree it’s an issue and there needs to be more than one solution to ensuring Canadians have enough money when they retire.
One of the groups opposed to CPP enhancements is the Canadian Federation of Independent Business (CFIB), which says it would have a serious impact on the economy.
The group recently released the results of a survey, which the CFIB said found 18 per cent of working Canadians saw increases to CPP and Quebec’s equivalent QPP as one of the best ways for government to help save for retirement.
That survey asked respondents to pick up to three options, including controlling government spending and reducing taxes to allow Canadians to contribute more towards retirement savings, and creating incentives for people to save.
There were five options that ranked higher than increased CPP and QPP contributions.
The online survey of 1,607 working Canadians who were 18-years-old or older was considered accurate to within plus or minus 2.5 per cent, 19 times out of 20.
In a news release from Erin McGrath-Gaudet, the CFIB’s director of provincial affairs for P.E.I., she said the finance ministers should be asking if mandatory CPP and QPP increases are a good idea, not just when is the right time to introduce them.
“Although governments have been talking about this for years, they have not stopped to ask Canadians if they support the idea or if it’s the best option for enhancing retirement savings,” she said.
The CFIB said its survey of member businesses showed almost ? of them responded they would be under pressure to freeze or cut salaries if faced with a CPP or QPP increase.
Sheridan said changes were made in the 1990s to fix the plan through higher premiums that didn’t lead to increased benefits and the same arguments against were made at that time.
Those changes didn’t cripple the economy, he said.
“All of this fear mongering over this job aspect is...hard to take when we’re talking about a 1.5 per cent increase over five years.”
Sheridan has been working on the issue for a long time, but he said it’s an issue he was passionate about and anything that impactful was worth the fight.
“We can’t kick this can down the road any further,” he said.
If the plan moves ahead, Sheridan foresees it starting in 2018.
Along with the CPP discussions at the meeting, Sheridan said the provinces will get an update from the Bank of Canada about the state of the Canadian economy.
They will also get their equalization payments, which won’t have any “outlandish” changes, Sheridan said.
“We expect no surprise.”