Federal and provincial finance ministers have reached an agreement in principle to reform the Canada Pension Plan.
Pension reform requires consent from the federal government as well as a minimum of 7 provinces, representing at least two-thirds of the country's population.
Manitoba and Quebec are not involved the deal, but have agreed to be part of the discussions moving forward.
“Manitoba’s a brand new government,” Federal Finance Minister Bill Morneau said in a media briefing in Vancouver. “They were a productive voice around the table, a voice of continued interest in working together.”
“This comes pretty fast and hard for them. We’re going to continue to work together to get to something that’s right for the whole country.”
Under the agreement, staring in 2019, contributions for a typical worker earning about $55,000 would initially increase by $7 a month and employers would match those contributions.
“That’s going to improve their retirement outcomes,” said Morneau.
Walter Kalinski, 80, runs a hot dog cart to make ends meet.The $1200 per month Kalinski gets through Old Age Security and CPP just does not cut it.
"It's not enough to retire on,” Kalinski said. “This is why I’m still with the hot dog cart, trying to do my best."
Federal, provincial and territorial finance ministers met in Vancouver trying to determine if the CPP should be expanded and if now's the time to do it.
The findings of an Angus Reid Institute poll suggest most Canadians support expanding CPP. 75 per cent of respondents said it should either be moderately or significantly expanded.
Any changes would require support from the federal government, as well as a minimum of 7 provinces, representing at least two-thirds of the country's population.
The changes won't help Kalinski, but could help boost the public pension program for people whose retirements are decades away.
University of Winnipeg economics professor Phil Cyrenne said pension reform may not sit well in the business community.
"It's going to raise the cost of labour for them and also they have to make contributions as well so that's sort of the big issue," Cyrenne said.
A reality food truck operator Don Campbell, 50, knows all too well. He does not have a company pension plan, he saves what he can, but would welcome the changes.
"I honestly don't think a lot of people put money away,” Campbell said. “Maybe by doing that it will force them to put money away which is a good thing otherwise they're going to be in their sixties and not have a lot of money.”
Kalinski opted out of his company pension plan and wishes he would have done things differently. He may eventually give up working and try and get by on less.
"Now the time's coming where it's too big of an effort to work the hot dog cart,” Kalinski said.
