Jim Flaherty and Wes Sheridan
P.E.I. Finance Minister Wes Sheridan says the federal government shut down a plan Monday agreed to by the provinces and territories to continue to explore the idea of boosting the Canada Pension Plan by raising premiums.
In a telephone interview with The Guardian following a meeting with his federal and provincial counterparts Monday, Sheridan said the provinces and territories had reached a consensus.
“We had made a proposal that we would have an independent third party go out and continue to look at CPP and make sure that we had full understanding of what the impact would be on families, business and all Canadians,” Sheridan said.
“The federal government is saying unilaterally that they do not agree with a CPP enhancement and they don’t have any intention of ever doing it. Period, end of story.”
That’s why Sheridan now says provincial finance ministers are now taking the next 24 hours to determine how best to respond.
He says what happens next could be very interesting.
“I don’t know if there’s ever been a time where the provinces and territories have been in such a different position than the federal government.”
Sheridan’s proposal to enrich the CPP would see contributions for both workers and employers hiked in order to double the current maximum payout of $12,150 a year.
This would require a 3.1 per cent increase in contributions for those earning between $25,000 and $51,000 a year.
The plan would also see the maximum insurable earnings cutoff raised to $102,000 from its current cutoff of $51,000.
This would extend the amount of premiums paid into the plan, contributing to the larger eventual payout.
Going into the meetings Monday, Sheridan said he would be willing to push back the phase-in period for these changes by several years in order to get Quebec’s onside.
Despite the consensus reached among the provinces and territories to continue to explore this plan, Federal Finance Minister Jim Flaherty and secretary of state for finance Kevin Sorenson emerged from the meetings Monday saying now is not the time to raise payroll taxes to pay for higher pensions.
Sorenson said higher pension premiums would mean lost income and lost jobs.
Ontario’s finance minister, Charles Sousa told reporters his province is now prepared to go it alone with pension improvements.
Sheridan says he and his other counterparts will take the next day to decide whether they too will move forward without the feds.
“What I would like to see happen is that all parties would reconsider and we would go out and do this type of independent study that would result in a real path forward,” Sheridan said, adding his displeasure at Flaherty and Sorenson’s actions Monday.
“It’s very disappointing in the way that they’ve managed their message. But I’m not disappointed in (the provinces and territories). I’m proud to be part of that team and we’ll continue to try to do what’s right for Canadians.”
With files from The Canadian Press.