Budget 2016: Government to consult on enhanced CPP

In its first budget, presented on March 22, the federal government announced it would launch consultations in the coming months to give Canadians an opportunity to share their views on enhancing the Canada Pension Plan.

The move got a positive reception from the Canadian Life and Health Insurance Association.  “We believe that the CPP levels should be reviewed, but the private sector should also play a key role in retirement savings by Canadians,” said Frank Swedlove, president and chief executive officer of the CLHIA.

In February, Finance Minister Bill Morneau said he was working with the provinces and territories to expand the Canada Pension Plan and he confirmed his commitment to do it within the year.

Read: Expect retirement changes in the federal budget, says Morneau

“An enhanced Canada Pension Plan would represent a major step in improving retirement outcomes for workers and reducing the uncertainty that many Canadians feel about being able to enjoy a secure and dignified retirement,” said the budget document.

Read: CPP to be expanded within the year

In response to the budget, the Canadian Federation for Independent Business expressed alarm at the minister’s personal commitment to reaching an agreement to expand the Canada Pension Plan/Quebec Pension Plan before the end of the year.

“If there was going to be one promise to defer in the budget given the state of the economy, it should have been the commitment to hike CPP/QPP payroll taxes,” said Dan Kelly, CFIB president.

The CFIB said it’s actively lobbying provincial governments to reject the proposal, which is expected to be discussed in a June meeting of finance ministers.

Read: Finance ministers agree to revisit pension reform talks in 2016

Read more stories about the impact of Budget 2016