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Ontario won't agree to CPP reform that it deems too modest, says Wynne

Last Updated Jun 17, 2016 at 5:24 pm EDT

OTTAWA – Ontario Premier Kathleen Wynne, whose province wields much of the power in upcoming talks about how best to improve the Canada Pension Plan, says she won’t sign on to a national proposal if she thinks it’s too modest.

The start date of any CPP enhancement is also key, Wynne told The Canadian Press — she’s not eager to wait more than a couple of years.

And what’s more, Wynne said in an interview Friday, she’s prepared to go ahead with an eventual deal on the pension plan even if there’s a handful of provinces that aren’t on board.

Wynne outlined some of her expectations about boosting the CPP as federal-provincial finance ministers prepare to negotiate a potential deal during a meeting Monday in Vancouver.

As the leader of Canada’s most populous province, her voice counts — Ontario essentially holds a veto over any decision at the table.

“We’re looking for an adequate enhancement and that’s definitely the position that we’ll be putting forward,” Wynne said.

“It’s not enough just to have an insignificant change. We’re really looking for an enhancement that’s going to solve challenges of people in a real way.”

The CPP debate is significant for Ontario, which has been pushing hard for years to upgrade the plan out of concern that retirees decades from now may lack adequate retirement savings.

Wynne repeated that 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.

“So, if it’s a very, very modest enhancement, that’s not something that we’ll be eager to agree to,” she said, adding that the province would abandon the ORPP plan if an agreement to adequately expand the CPP is reached.

In recent days, however, finance ministers from other provinces, including Quebec and Alberta, have reservations about upgrading the pension plan. Saskatchewan says now isn’t the time.

Finance ministers from all three provinces say they are worried about the potential impact of higher pension contributions could have on both workers and businesses, and thereby their provincial economies.

However, in some cases, Canada-wide changes could still happen without their support.

Any changes to the CPP would require the consent of the federal government and a minimum of seven provinces representing at least two-thirds of the country’s population.

“There’s a formula for what the critical mass is for agreement and I think if the overwhelming majority of the provinces agree — in terms of the size of the population and so on — then I think we need to find a way to move ahead,” Wynne said.

Asked about the fact Saskatchewan’s population gives it less bargaining power compared to several bigger provinces, Finance Minister Kevin Doherty said that’s just the way Canada’s federation works on many issues.

“If that’s the will of the room, then we’ll work with whatever comes out of there.”

Wynne said she would like a CPP phase-in period similar to the one for the proposed Ontario pension plan, which is due to begin collecting contributions from certain employers on Jan. 1, 2018.

“We’re not willing to wait another five or 10 years to do this,” she said. “Then we miss a number of cohorts of workers going through, so we want to get started soon. So, that’s going to be one of the challenges that we bring to the table.”

She suggested that could include a change to the CPP legislation.

The law states that any agreed-upon CPP reforms can only be implemented three years after a federal-provincial agreement is reached, said Kevin Milligan, a University of British Columbia economist.

That means if ministers agree on a deal this year, the earliest the changes could begin would be Jan. 1, 2019, Milligan said.

“Some of those things are being talked about now in terms of the timing and that’s what I mean about a phase-in,” Wynne said.

“So, I think we need to let the finance ministers talk with the federal finance minister and see what they can hammer out. But we’d like to move as quickly as we can.”

Federal Finance Minister Bill Morneau has said he wants to see a deal to expand CPP completed by the end of 2016, but talks are now in high gear in the hopes of a preliminary agreement much sooner.

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