Canadian provincial finance ministers on Monday failed to reach agreement on a proposal to expand the C$192.8 billion (US$182 billion) Canada Pension Plan, Ottawa.
“There was no consensus on moving ahead with a plan today,” said Kevin Sorenson, Canadian minister of state for finance, said in a transcript of a news conference after the two-day meeting in Chelsea, Quebec.
The proposal was put forth by Wes Sheridan, finance minister of Prince Edward Island, and was supported by the Ontario provincial government. It would have increased the formula for CPP participant benefits to 30% of a participant's average wage from the current 25%, to be funded by higher government contributions and payroll taxes.
The proposal is one of two to enhance Canadians' retirement savings. A proposal for employers to offer a pooled retirement plan was approved by the federal government in 2011 but still requires approval from each of Canada's provinces. Under Canadian law, two-thirds of the provinces representing two-thirds of the Canadian population must approve the changes.
The Canadian Federation of Independent Business, which opposed the CPP expansion plan, said in a statement that small-business owners were “breathing a sigh of relief” that no agreement was reached. CFIB supports the proposal for a pooled retirement plan.
Mr. Sorenson had said earlier this month that he opposed expanding the CPP and the separate C$38 billion Quebec Pension Plan, Quebec City. “Families and the economy simply cannot afford hiking CPP payroll taxes that would take money out of the pockets of employees and then … force employers to cut jobs, to cut hours and to cut wages,” Mr. Sorenson said in the transcript.
After Monday's meeting, Charles Sousa, Ontario finance minister, said Ontario would move ahead with creating a supplemental pension plan, as suggested by Ontario Premier Kathleen Wynne earlier this year. “Given today's unfortunate stall tactic by the federal government, we will move forward to implement a made-in-Ontario alternative to protect Ontario workers in their retirement,” Mr. Sousa said in a statement.