Finance ministers from Canada and its provinces on Tuesday announced an agreement in principle to expand the C$278.9 billion ($218.2 billion) Canada Pension Plan, Ottawa.
Following a meeting Monday in Vancouver, Canadian Finance Minister William Morneau announced on the ministry's website that the agreement was reached with finance ministers from British Columbia, Alberta, Saskatchewan, Ontario, Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador.
Ministers from Quebec and Manitoba did not join in the agreement but said they would “remain part of the discussions moving forward,” according to a news release on the Canada Finance Ministry website.
The agreement would raise benefits to one-third of pensionable earnings from 25%, increase the maximum annual earnings cap to C$82,700 by 2025 from the current C$54,900 and provide a tax deduction instead of the current tax credit for employee contributions into the enhanced portion of CPP.
The agreement must be ratified by the Canadian government and seven provinces representing two-thirds of the Canadian population.
An earlier attempt to reach an agreement to enhance the CPP, in December 2013, was unsuccessful, with the Conservative government of former Prime Minister Stephen Harper not supporting any enhancement. Current Prime Minister Justin Trudeau supported enhancing CPP during his election campaign last year.
Ontario has moved ahead with its own CPP enhancement program, the Ontario Retirement Pension Plan, with a start date of Jan. 1, 2017, for gradual implementation. Charles Sousa, the province's finance minister, said in a separate statement with Mr. Morneau that the Ontario plan would be halted if all signatories to the agreement in principal approve the CPP enhancement by July 15.