British Columbia Nears Decision on CPP Improvements

Having heard solid support from the public for the national proposal to expand the Canada Pension Plan, the British Columbia government is poised to release a decision on its participation.

B.C.’s approval is critical as the plan Canada’s finance ministers agreed to in June requires the approval of two-thirds of the provinces representing two-thirds of Canada’s population.

“The consultative work is complete, and I am anticipating a decision by government within the next week or so,” Finance Minister Mike de Jong told The Tyee.

The province delayed signing the agreement, missing the federal government’s July deadline and instead launching a consultation process.

“By an almost two-to-one margin there was pretty strong support for the proposal,” de Jong said.

Signing the agreement requires a decision by cabinet, or order-in-council. “I am anticipating a decision around issuing or not issuing an [order-in-council] within a week or so,” de Jong said. “Stay tuned and you won’t have to wait long for a decision.”

B.C.’s next cabinet meeting is scheduled for Oct. 12.

Under the deal, the CPP would increase to replace one-third of pensionable earnings, an increase from the current one-quarter. The increase would be phased in over seven years, starting in 2019.

A person making $55,000 per year would pay about $7 more a month, and employers would match that. In retirement, the person would receive about $4,300 more a year in pension.

The Canadian Labour Congress has campaigned for an expansion to the CPP since at least 2007.

“We’re pleased it’s finally being done by B.C.,” said Irene Lanzinger, the president of the B.C. Federation of Labour. “This will be the largest improvement to a social program in decades.”

The CPP enhancement will benefit all workers, whether or not they belong to a union, Lanzinger said.

Aaron Aerts of the B.C. office of the Canadian Federation of Independent Businesses said the organization has had no indication from the province about what the government intends to do.

“They’ve been pretty vague and kind of cloudy on it,” he said. The organization opposes the expansion, which Aerts said would add an expense for businesses. “It’s a big issue for a lot of small business owners.”

B.C. has waffled on expansion of the CPP. In 2009, former finance minister Colin Hansen said the financial crisis made it clear there was an urgent need for a national approach. And in 2015 de Jong said the economy was “too fragile” to support the change.