Canada is headed for a "huge economic crisis" if the provinces and federal government don't take action now to improve retirement incomes, Ontario Premier Kathleen Wynne warned Tuesday.
"One of our fundamental priorities is retirement income security, especially for the middle class," Wynne told a business audience in Toronto
Ontario's Liberal government recently announced it would create a provincial retirement income plan if it can't convince Ottawa and the other provinces to enhance the Canada Pension Plan.
Wynne will raise the retirement income issue with the other provincial and territorial leaders when they meet Friday in Toronto.
Ontario is not the only province that has been pushing for action on the CPP for the past several years. Prince Edward Island wants to boost maximum CPP contributions to $4,681.20 a year from $2,356.20 starting in 2016, and also increase the maximum annual benefit to $23,400 from $12,150.
Quebec and Alberta have opposed CPP reform, which last week federal Finance Minister Jim Flaherty agreed was a good idea. However, Flaherty said it should only be considered when the economy is stronger.
"It's a payroll tax on employers and employees," warned Flaherty. "I don't think the idea is a bad idea, I just think the economy has to be able to afford it at the appropriate time."
Wynne said the slow economic recovery is not an excuse to avoid boosting CPP contributions and benefits.
In December 2010, Ottawa and the provinces agreed to a half-way measure by creating so-called voluntary pooled registered plans, but Ontario says that's not enough.
Several business lobby groups have opposed enhancing the CPP, instead advocating for Canadians to find alternate plans for retirement, including the pooled pension plans and other forms of savings without increasing the cost to businesses.
Ontario also intends to push the pension reform issue when the provincial and territorial finance ministers meet with Flaherty in Meech Lake, Que., next month.
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