VANCOUVER – Most of Canada’s finance ministers reached an agreement in principle Monday to revamp the Canada Pension Plan, although Quebec and Manitoba have not signed on to the deal.
Under the agreement, which would go into effect in 2019, contributions for a typical worker earning about $55,000 would initially increase by $7 a month and employers would match those contributions.
The plan would be phased in over seven years until 2025 and it means when people retire their maximum annual benefits would increase by about one-third to $17,478.
Finance Minister Bill Morneau said they’re going to improve the pension plan in a way that will make a difference to working Canadians.
Ontario Finance Minister Charles Sousa said after the meeting that what they achieved Monday was for Canada’s youth.
“Today, this federal government has shown great leadership and great desire to do something of great benefit for our young people.”
Sousa said the plan would replace the one his government had been working on.
British Columbia Finance Minister Mike de Jong said the plan is affordable for employees.
“I think we have reached a balanced approach to setting the objectives that were set out.”
A change to the CPP needs the consent of Ottawa and a minimum of seven provinces representing at least two-thirds of the country’s population.
Heading into the federal-provincial meeting, it was still unclear whether Ottawa would piece together the minimum required provincial support for change. Saskatchewan, for example, did not support CPP enhancement.
Related: 5 things to know about CPP expansion
Sources say Ottawa made a major 11th-hour push in hope of securing enough country-wide support to boost the CPP and suggest Prime Minister Justin Trudeau was involved in the extra effort.
There hasn’t been such a level of consensus on CPP reform at a national scale since the 1990s.
Morneau has argued that enhancing the CPP is critical to ensuring future generations will be able to retire in dignity, no matter the state of their finances.
However, critics have warned that expanding the CPP would squeeze workers and employers for additional contributions — and hurt the still-fragile Canadian economy.
The federal government intensified its lobbying efforts over the final days and hours of ongoing meetings in Vancouver as it tried to attract support from enough provinces to ensure a CPP upgrade, said sources with knowledge of the talks.