Canada provinces fail to reach deal with Ottawa to lift pensions

Mon Dec 16, 2013 4:14pm EST
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By Louise Egan

MEECH LAKE, Quebec (Reuters) - Canada's federal government and the governments of its 10 provinces failed to agree on Monday on a deal to enhance the country's public pension plan.

Some provinces, worried by studies showing Canadians are not saving enough for retirement, want to boost Canada Pension Plan (CPP) payouts by obliging workers and employers to make higher contributions.

But the federal Conservative government says asking people to pay more at a time when the world economy is still fragile makes no sense.

"Now is the time for fiscal discipline ... now is not a time for CPP payroll tax increases," Junior Finance Minister Kevin Sorenson told reporters after what he called a very frank discussion.

"There was no consensus today on expanding CPP. We will continue to look at the economy and discuss this again in the future," he said.

The idea of enhancing the CPP has been on the provinces' agenda for several years, with most proposals calling for higher contributions in order to double the maximum retirement benefit from the current C$12,150 ($11,460) a year.

Charles Sousa, finance minister of the influential province of Ontario, said the federal government was the main opponent of reforming the system.

"I'm very disappointed that they used stall tactics to ensure that CPP enhancement wasn't even considered at this time," a visibly angry Sousa told reporters, saying his province was determined to go it alone.   Continued...