Joe Oliver to consult on 'voluntary' Canada Pension Plan boost
Mandatory increase in CPP still considered 'payroll tax' by Conservative government
Finance Minister Joe Oliver says his government is ready to start consulting Canadians on allowing larger, "voluntary," contributions to the Canada Pension Plan.
"We are open to giving Canadians the option to voluntarily contribute more to the Canada Pension Plan to supplement their current retirement savings," he told the House of Commons on Tuesday.
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Oliver said the move would build on the Harper government's record of creating more options for retirement savings, including the pooled pension plans and tax-free savings account alternatives championed by the Conservatives. A statement released by his office said that "by providing voluntary, flexible savings tools, Canada's retirement system is, in fact, now among the best in the world."
No more details were provided in his brief answer to a planted question from a Conservative caucus colleague. It's unclear how the voluntary contributions would work, or what limits would apply.
But Oliver reiterated his government's position on hiking basic premiums, something federal government talking points have called a "mandatory, job-killing, economy-destabilizing, pension-tax hike on employees and employers."
"What we will not do is reach into the pockets of Canadians with a mandatory payroll tax, like the Liberals and the NDP would do," Oliver said in question period.
"A one-size fits all pension tax hike is not what Canadians want, nor what they need," Oliver's release said.
Policy reversal?
This is the second time in two years the government has seemingly done an about-face on the CPP issue.
In 2010, then-finance minister Jim Flaherty announced consultations had begun to expand CPP, calling the program "the envy of the world."
He said the expansion should be "modest and phased in," and that provinces were on board.
Then, in 2013, he abruptly backtracked and started referring to the CPP as a "payroll tax" that the country couldn't afford until there was more economic growth.
Employees and employers are each required to contribute up to almost $2,480 annually on income up to $53,600.
This year, the CPP pays out a maximum benefit of $12,780.
Past proposals have suggested doubling both the contribution cap and the maximum payout. Although Flaherty had made it clear he wasn't in favour of going that high, he never publicly outlined what numbers he had in mind.
Oliver now intends to spend the summer months ahead of a coming election consulting with "experts and stakeholders," on what voluntary contributions to the CPP might look like.
Finance critic NDP MP Nathan Cullen questioned what he called the Conservatives' "death-bed conversion" to CPP enhancement.
"It's incredibly vague. It's a non-announcement today. This is at the very last minute. If they were serious about this, we would have seen something a lot sooner," he said.
Ontario Liberal MPP Mitzie Hunter, the associate minister of finance, dismissed the announcement, saying the federal government "has made it clear they have no real interest in enhancing CPP."
"It's disappointing that the federal government is only concerned with their short-term election prospects instead of providing a secure retirement for millions of Canadians."
Canada's most populous province recently passed a bill approving the creation of a provincial pension plan that would start in 2017. Ontario's plan, which would be phased in over a two-year period, would be for those who don't have a workplace plan.
With a file from The Canadian Press