Enriching CPP benefits good idea, but only when economy stronger: Flaherty

OTTAWA – Finance Minister Jim Flaherty says he’s in favour of enriching the Canadian Pension Plan, but only once the economy is significantly stronger.

The finance minister’s comments appears to have poured cold water on efforts by some provinces, particularly Ontario and Prince Edward Island, to take action on the issue at the upcoming first ministers’ meeting next month.

Flaherty says enriching the CPP would entail raising premium levels for both companies and individual workers, and now it is not the time for increasing payroll taxes.

But a recent proposal from PEI would only take effect in 2016, when even Flaherty’s projections predict the budget will be balanced and the economy will be healthy with a nominal gross domestic product growth rate of above four per cent.

The Canadian Federation of Independent Business has vehemently opposed any changes that would drive up premiums.

However, advocates for seniors, unions and the opposition NDP party, believe the time has come to top up the plan because too many Canadians rely on the CPP for post-retirement income.

Flaherty says he remains open to the idea, but added that the economy has to be able to afford it.