Flaherty Says Now Is Not The Right Time To Expand Canada Pension Plan

Federal Finance Minister Jim Flaherty is not ruling out a revamp to the Canada Pension Plan in the future, but says now is not the time to be contemplating major changes.

“What we’ve always said is we are prepared federally to work on improvements to the Canada Pension Plan as part of our review process, but not implementing anything right now,” Flaherty said Monday before the start of a meeting with his provincial and territorial counterparts in Kananaskis, Alta.

“Right now is probably not a good time to impose any more burdens on employers in Canada because the economic recovery is fragile. We want to continue to create jobs in Canada, so we have to be cautious and moderate in what we do, and it needs more work in any event.”

Any debate about changes to the CPP are “academic” since there is no consensus among provinces, he said.

Quebec Finance Minister Raymond Bachand agrees with Flaherty that the time isn’t right to expand the CPP now, but that doesn’t necessarily mean never.

“You make these decisions once a generation. You can take another nine months to study it closely,” said Bachand, who added that there is a lot more agreement among the provinces than it would appear.

Flaherty has floated a private-sector plan that would allow small firms, employees and even the self-employed to pool resources on new, low-cost pensions.

Finance ministers from six provinces say they’re not against that idea, but believe CPP enhancements are also necessary to ensure Canadians have adequate income in their retirement.

Ontario Finance Minister Dwight Duncan has called Flaherty’s decision to take a CPP expansion off the table a mistake.

Gil McGowan, president of the Alberta Federation of Labour, said he doesn’t buy the idea that improvements to the CPP have to wait until the economy improves.

“This argument that a recession is no time to make major policy change is a red herring because there are all sorts of ways to get around those concerns,” he said.

For instance, McGowan suggested, finance ministers could agree on a policy Monday, but wait until 2012 or 2013 to enact it.

“We had a real opportunity and I think we still have one to make a game-changing policy change that will improve the lives for future generations of Canadians,” he said.

“Our hope is that the provincial finance ministers who support CPP expansion will be successful in encouraging Jim Flaherty to come to his senses and realize that his original position in support of CPP expansion is really in the broader public interest.”