Quebec Finance Minister Carlos Leitao says federal−provincial talks over Canada Pension Plan enhancement are expected to boil down to one or two options by next week.
Leitao tells The Canadian Press he doesn’t expect the country’s finance ministers to hammer out a final deal when they meet in Vancouver next Monday because they’ve already agreed to study one or two proposals until December.
Federal Finance Minister Bill Morneau has said he wants to see a deal to expand CPP completed by the end of the year, but talks are now in high gear in the hopes of a preliminary agreement much sooner.
Leitao says there is a willingness among provincial and territorial finance ministers to create a national program, but he notes there is still disagreement among them on how best to proceed.
He says the scenarios still on the table include one that would beef up the CPP program across the board and another that would target middle−income earners.
Leitao says, for example, contributions could be increased on income levels between $25,000 and $80,000 to strengthen retirement security for middle earners.
Quebec, however, has concerns that a broad−based increase to CPP contributions would have considerable impact on workers and employers because they would be called upon to fund the change through payroll taxes.
"We think that there is no crisis regarding public pensions in Canada," Leitao said Wednesday in an interview.
"But yes, we are willing to look at ways to improve the current system. But any such improvement ... targeted to a certain income group should be relatively modest and put in place gradually."
Quebec’s support for CPP enhancement is crucial for the federal government as it tries to get enough provinces to back a change to the system.
For the last six months, provincial and federal officials have reviewed and analyzed potential changes to the federal plan, to see what is palatable in terms of an increase in benefits, an increase in premiums and where to set the bar on the income cut−off for paying CPP premiums.
But reaching an agreement is not easy.
Making changes to CPP requires the consent of seven provinces representing at least two−thirds of the country’s population, a higher bar than the amending formula for the Constitution.
That math also makes Ontario’s consent a necessity for any changes to occur.
Earlier Wednesday, Ontario Premier Kathleen Wynne said she is willing to agree to an expansion of the Canada Pension Plan if the value of benefits almost equals the amount of her proposed provincial pension plan.
Wynne said she wants to see CPP benefits increase to be about two thirds of what has been promised under her government’s proposed pension scheme, the Ontario Retirement Pension Plan.
She didn’t put a firm dollar figure to her request, but signalled that Ontario wanted to see the maximum yearly CPP payouts almost double to about $21,000 from approximately $13,000.
"We’ve said if we can get to, sort of, two−thirds of the value of what we have — what we’ve worked up with the Ontario Retirement Pension Plan, that’s one of the metrics that we would look at for a CPP enhancement," Wynne said in Windsor, Ont.
"That’s the order of discussion that we’re having with the federal government."
Wynne has said her province is willing to go ahead with the ORPP in the absence of any agreement on CPP expansion.
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