Bokhari not convinced by federal plan to enhance CPP

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This article was published 01/04/2016 (3486 days ago), so information in it may no longer be current.

OTTAWA — Manitoba Liberal Leader Rana Bokhari is not entirely on board with her federal counterparts when it comes to expanding the Canada Pension Plan as a means to getting Canadians to save more for their retirements.

Bokhari told the Free Press this week the country has to find a solution to the problem of people not saving enough for retirement, but she is not convinced the Liberal government in Ottawa is on the right track with plans to enhance the CPP.

“I understand that people aren’t saving enough, but I just don’t know if that is the way to do it,” Bokhari said. “I feel like the strain on business could be pretty big. I have to think about Manitobans and how this will affect businesses, so that is my number 1 thing.”

Prime Minister Justin Trudeau promised during the election to work with the provinces to enhance the CPP. He can’t do it without agreement of at least seven provinces representing two-thirds of the population. Finance Minister Bill Morneau already held one meeting with his provincial counterparts in December to discuss it. Another meeting is scheduled for June.

Ontario is already planning to introduce a provincial pension plan next year for workers without workplace pensions, and it’s expected the federal Liberals will be looking at that plan strongly as they push for CPP expansion nationwide.

Many provinces are on board with making changes, but some, notably Saskatchewan and British Columbia at the moment, have objections. Concerns with expanding the CPP in large part rest with the impact of imposing a greater payroll tax on employers at a time when the economy is struggling and we need businesses to invest in job creation.

NDP Leader Greg Selinger, who is seeking a second mandate as Manitoba premier, thinks CPP must be expanded and said there is a way to phase in any changes that make the added costs more palatable to employers and employees alike.

“There are too many young people now who aren’t getting access to a pension plan,” he said.

Selinger said if generations of Canadians get to retirement without enough money to live on after they stop working, there will be higher social costs to government down the road.

“Those that are against it have to explain how they are going to pay for the increased social costs on the other side,” he said.

Selinger added the issue of retirement savings isn’t top of mind for many in this election, but when people are asked about it, there is clearly a significant concern about the issue.

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PC Leader Brian Pallister said before he entered politics, he spent a lot of time advising people about retirement as a financial consultant, and he does think there is reason to be concerned about how much people are saving for retirement. But while Pallister said, “My gut says push pensions up,” he is also uneasy with expanding CPP at a time when Manitobans have faced numerous tax hikes and fee increases and are already struggling to make ends meet.

“We need to concern ourselves with getting the government operating effectively, and eliminate the waste and leave more money on the kitchen table instead of putting it on the cabinet table,” said Pallister. “I can tell you I understand the dilemma, and the concerns long-term are real. It’s the timing.”

It’s estimated about five million Canadians have no workplace retirement savings at all. In 2011, about one in four private-sector employees were in some kind of registered pension plan, compared with 44 per cent in 1984.

mia.rabson@freepress.mb.ca

kristen.annable@freepress.mb.ca