CHARLOTTETOWN – P.E.I. Finance Minister Wes Sheridan is taking his pitch for CPP reform to Ontario this week and to the rest of the provinces next week in his bid to see premiums boosted and benefits expanded.
© Guardian photo
Finance Minister Wes Sheridan
Sheridan believes the Canadian Pension Plan needs to be enhanced in order to ensure better payouts for middle income Canadians when they retire.
He has been championing his plan for CPP reform to business and finance leaders across the region and has been garnering national media attention over his proposal.
“I’d like to see Canada, at this very pivotal time, make the decision to enhance the CPP,” Sheridan said.
His plan would see CPP contribution rates increased by 3.1 per cent for those earning between $25,000 and $51,000 a year. Currently, CPP premiums are not charged to any income earned higher than $51,000.
Sheridan’s plan would also see that maximum insurable earnings cutoff raised to $102,000.
This extends the amount of premiums paid into the pension plan and provides for richer payouts upon retirement.
The goal is to provide middle income Canadians with pension benefits more comparable to their current earnings than the CPP as it exists today can provide.
Currently, annual CPP benefits top out at $12,150 a year.
“It’s just not adequate anymore, our needs are changing,” Sheridan said.
Federal Finance Minister Jim Flaherty has been cool to the idea in the past. That’s why Sheridan is now taking his pitch to the provinces.
Changes to the Canadian Pension Plan require the approval of Parliament but also of at least two-thirds of the provinces with two-thirds of the population of Canada.
Sheridan meets Thursday with Ontario Finance Minister Charles Sousa where he will lay out his plan and try to convince Sousa to join him in championing it.
Next week all provincial and territorial finance ministers get together in advance of a key meeting in December of the ministers and Flaherty.
“So we’re hoping we can lead up to our meeting in December showing Mr. Flaherty very clearly that we do have the required amount of provinces on side, so it makes it much easier to sell it to him,” Sheridan said.
He added he’s not married to every detail in his plan, but hopes to inspire a move toward reforms that will help Canadians retire with more livable incomes.
“I just wanted to put out objectives that we want to achieve and if there’s alterations or different proposals that are better, I’m all up for that. I just wanted to get the conversation started.”