REGINA – Saskatchewan Premier Brad Wall says he doesn’t want to see an increase to contribution rates for the Canada Pension Plan, at least right now.
“I just don’t think it’s right for the Canadian economy right now and we have to take a national view of this,” Wall said Wednesday at the legislature.
“And so our position has been pretty consistent from the beginning: there can be a discussion I think, as to when the conditions are right for a national change here, remembering that wouldn’t just occur in one part of the country that might be economically strong.”
Wall pointed to recent jobs losses in Ontario where Kellogg Co. plans to shut the doors of its cereal plant in London by the end of next year, cutting more than 500 full-time jobs, and food producer Heinz announced it was closing its tomato plant in Leamington, Ont., eliminating 740 full-time jobs.
He says that’s not just bad for Ontario, but for Canada.
“I just don’t think that the national economy needs a significant cost added to job creation or job retention,” he added.
“Employers look like they’re looking for reasons, or if not looking for reasons, open to reasons for leaving those kinds of economies in our country — witness the recent layoffs and shutdowns. I don’t think we should give them any more.”
Saskatchewan’s economy has been growing for the last several years, but Wall also says he doesn’t think it’s ready for “another hit on payrolls.”
“I listen carefully to small business in this province, as we all should as the major generator of jobs, and I just don’t think the timing’s right for our economy either,” he said.
However, the premier says there could be a discussion about when the time would be right and what economic factors should be in place to change the CPP. In the meantime, Wall says there should be a focus on voluntary pooled registered pension plans and provincial ones, like the Saskatchewan Pension Plan.
A federal-provincial meeting on CPP reform broke up Monday after several provincial ministers accused Finance Minister Jim Flaherty of blocking efforts to enrich the plan or even agreeing to further study.
The federal position is that any hike in CPP premiums amounts to a payroll tax that would result in fewer jobs, as well as taking money out of workers’ pockets.
CPP reform requires approval of seven provinces representing two-thirds of the population, as well as a green light from Ottawa.
While there have been several options floated, most involve a three to 10 year phase-in period where premiums are raised to pay for a boost in benefits down the road, with the idea that young Canadians today will be ensured an adequate standard of living when they retire.
Currently, employees and employers split the 9.9 per cent contribution rate on pensionable earnings up to $51,100. That pays out to a maximum benefit of $12,150 a year, although the average payment to current retirees is about $7,200.
Kevin Sorenson, minister of state for Finance, said officials estimate that current proposals to expand the CPP could eliminate up to 70,000 jobs.
“We share the concerns of employees, small business and several provinces of increasing costs during a fragile global recovery,” Sorenson said in an email to The Canadian Press.
“We all want a stronger retirement system but we are wary of the significant costs — including smaller paycheques and lost jobs — for Canadian families and the risk to our economic growth a CPP expansion would trigger.”