British Columbia will support the enhancement of the C$287.3 billion ($218.8 billion) Canada Pension Plan, Ottawa, provincial Finance Minister Michael De Jong said Tuesday.
The province had held off on endorsing the proposal agreed to June 21 by provincial ministers and Canada Finance Minister William Morneau.
“It was important that we take the time to talk to British Columbians about the Canada Pension Plan enhancement, to make sure both employers and employees understand what the proposal means in terms of contributions and benefits,” Mr. De Jong said in a news release. “After hearing from thousands of British Columbians and Canadians, I'm confident the changes will have a meaningful impact on retirement income security at an affordable contribution rate.”
All other provinces approved the expansion except for Quebec, which abstained from endorsing. Quebec does not participate in the CPP but is expected to make some sort of enhancement to its C$57 billion Quebec Pension Plan.
The proposal agreed to by the ministers will 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 boost employer and employee contributions by up to 1 percentage point each by 2025. The contribution increase — to as much as 5.95% from the current 4.95% — would be phased in beginning in 2019.
An earlier attempt to reach an agreement to enhance the CPP in late 2013 was unsuccessful, with the Conservative government of former Prime Minister Stephen Harper not supporting any enhancement.
Legislation to enact the enhancement plan requires approval of at least seven of Canada's provinces representing two-thirds of the country's population and formal consent of the Canadian Parliament. Mr. Morneau said in September that the government would soon propose an enhancement bill to Parliament for a vote this fall.