Canadian finance ministers worked out a deal this week that will enhance the financial security of Canadian seniors for generations to come.
Canadian Finance Minister Bill Morneau walked out of an all-day meeting in Vancouver Monday to announce an agreement in principle had been reached with a majority of his provincial counterparts to overhaul the Canada Pension Plan. It was a unexpectedly quick resolution to a problem that has long been a concern of Canadians nearing retirement.
Under the agreement, the average Canadian working earning about $55,000 a year will initially pay an additional $7 a month in CPP premiums, increasing to $34 a month by 2023. Employers would see their premiums increase by a similar amount.
The increases are not insignificant, but they are modest in comparison to the benefits that will be seen by seniors. The maximum annual benefits will be increased by nearly a third, going from $13,110 today to $17,478 when the plan is fully implemented.
“We have come to a conclusion that we are going to improve the retirement security of Canadians, we’re going to improve the Canada Pension Plan that will make a real difference in future Canadians’ situations,” Morneau said in announcing the deal that will bring the most significant changes to the CPP since its creation in 1966.
Of course, not all reaction was so positive. Some business groups warned the increased premiums for employers could result in job losses. But these are the same fears expressed after any suggested improvements to the lives of Canadian workers, and seem to suggest that staffing levels are not related to how much work needs to be done. This ignores the current economic realities that see corporations enjoying record profits while still eliminating jobs.
But the increased benefits could just as easily help stimulate the economy through encouraging more spending by retiring Baby Boomers. The same tired excuses that are always put forward simply aren’t enough to deny seniors a chance at financial security.