While an attempt to enhance the Canada Pension Plan (CPP) failed earlier this week, supporters of an expansion aren’t giving up.
“This is not dead at all,” said Paul Moist, national president of CUPE, in an interview with Benefits Canada. “CUPE will continue to call for CPP expansion, and the retirement needs of all workers are an important public policy option.”
He noted that CPP and old age security don’t provide enough to the two-thirds of Canadians who don’t have a workplace pension plan, and many don’t have an individual savings plan.
According to most recent data available from Statistics Canada, only 24% of Canadians made an RRSP contribution in 2011.
Moist says compulsory saving contributions through CPP expansion is an efficient and inexpensive option. “It’s an existing system that’s well run, and the management fees are a fraction of private mutual fund fees.”
But those who are against a CPP enhancement also plan to continue their fight.
“We don’t believe this is going away,” Plamen Petkov, vice-president of Ontario at the Canadian Federation of Independent Business (CFIB), told Benefits Canada. “I think the threat is still there, and this continues to be an ongoing campaign for us.”
While the CFIB believes every Canadian should have a decent retirement, it’s in favour of non-mandatory options such as pooled registered pension plans (PRPPs).
“If the employer can afford it, it’s certainly in their best interest to contribute, because this is going to make them an employer of choice,” said Petkov.
But Moist doesn’t believe a voluntary solution will help all Canadians.
“The so-called PRPP initiative is not a pension plan,” he explained. “And if historical trends hold true, so-called voluntary savings accounts with no contribution from employers—that’s a system doomed to failure, and we need a fix.”
The CFIB plans to submit a response to Ontario’s consultation paper on PRPPs in support of them and voice opposition to a mandatory pension plan in the province. It will also continue its campaign against CPP expansion.
“We think we’re not out of the woods yet,” Petkov explained. “And this issue will come up again, whether it’s at a provincial level here in Ontario [or at] a national level.”