The minister told reporters that some proposals calling for increases in contributions rates to the Canada Pension Plan to pay for enriched benefits can potentially damage the economy and may be too broad.
"You don't need a bazooka to go after a specific issue, you want to be more targeted, more precise," he told reporters Sunday night on his way to dinner with his provincial counterparts.
"I think we have to be targeted because the group that needs help pension-wise is 23 or 24 per cent of the Canadian population, it's not poor people. There is a group of middle class people that we need to be concerned about and there are different ways of approaching that."
Most experts agree that CPP and other government income programs are adequate income replacements in retirement for most lower-income earners.
It was unclear whether Flaherty will be presenting a specific proposal on Monday at the meeting that is shaping up as a showdown over whether to enrich the CPP, with Ontario Finance Minister Charles Sousa and Prince Edward Island's Wes Sheridan leading the way.
But the federal minister noted that as yet the pro CPP enrichment provinces don't have "a consensus to move forward right away."
Sousa took some encouragement that Flaherty is acknowledging that middle class earners, more than half of whom do not have a company pension plan, could face financial difficulties in retirement.
He noted that provincial finance ministers last month agreed on "a set of objectives and principles that should be addressed now so we can prepared for the inevitable."
In a recent interview, Sousa said he did not expect to come out of Monday's meeting with a concrete program that can be implemented once the economy is sufficiently recovered, but does expect ministers to agree in principle to move ahead on the issue, with the exact timing and details to be developed later.
Ontario has also suggested it may move ahead on its own if there is no progress.
For approval, CPP enhancement would require seven provinces representing two thirds of the population.
Observers believe that aside from Ontario and PEI, Nova Scotia, Newfoundland and Manitoba favour some kind of CPP enhancement measure, with Quebec just recently joining the camp.
Meanwhile, British Columbia, Alberta, Saskatchewan and New Brunswick are expressing reservations — along with Ottawa — mostly to do with the scope and timing of the initiative.
Susan Eng of the Canadian Association of Retired Persons who has lobbied for CPP enhancement, said she would be satisfied with a "conditional yes" if the ministers set hard triggers for enacting changes, such as specific levels of economic growth and employment rates. She added it was not enough to "simply say when things get better."
The Canadian Federation of Independent Business, however, is opposed to any enhancement, saying it prefers voluntary saving programs.
One plan under consideration, championed by PEI's finance minister Sheridan, appears specifically aimed at middle class earners by raising the threshold on insurable earnings from $51,100 to $102,200 when fully phased in, as well as hiking premium rates. That would see maximum annual benefits rise to $23,400 from the current $12,150 in future years.
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