Ottawa Mulls Pension Reform As Canadians’ Savings Fall Short

A crucial meeting of provincial finance ministers Monday will determine whether or not there will be changes to the Canada Pension Plan.

With a pension crisis looming on the horizon, Ottawa will have to choose between the stick and the carrot. Statistics show that amid the economic downturn Canadians simply aren’t saving enough for their retirement and for the past six months, Finance Minister Jim Flaherty has been advocating for mandatory increases to the CPP’s premiums and benefits to bridge the gap. Ahead of a meeting with Canada’s finance ministers Monday, he’s reversed that position by calling for a voluntary measure aimed at private-sector employees who don’t have a pension plan that would allow them to pool resources together. Critics say a voluntary scheme won’t compel Canadians to save more, but Alberta and Québec’s finance ministers have backed Flaherty's new plan.