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A Step-By-Step Guide To Increasing The CPP In Our Lifetime

10/27/2015 08:35 EDT | Updated 10/27/2016 05:12 EDT
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Canada Pension Plan

Members of Parliament who lost their seats in this election don't leave empty-handed. They get severance pay and a pension. We shouldn't begrudge them this soft landing - ex-parliamentarians are not readily employable unless you happen to have been Foreign Minister and left on their own accord.

For the rest of us, we might get a pension from work, but two-thirds of working Canadians today don't even have the chance to contribute to a pension plan. That's why increasing the Canada Pension Plan is so important.

But didn't Prime Minister-elect Justin Trudeau promise to increase the CPP? So we're good?

Not so fast! There's many a slip twixt the cup and the lip! A lot could go wrong before we see a single penny from that promise.

So let's take this Step by Step guide to Increasing the CPP in our Lifetime.

1. Let the Ontario Pension Plan Live: departing Prime Minister Harper was delighted to throw a monkey wrench into Kathleen Wynne's plan to implement the Ontario Retirement Pension Plan by refusing to let Ontarians use the existing payroll deduction mechanism to collect premiums. So the first easy step for the new government is to simply say: "yes". One extra field on the payroll form and we're done. The Province might even pay a bit for the inconvenience. At least taxpayers won't be on the hook for the mega millions needed to set up a whole another payroll deduction system when they're already paying for the one in Ottawa.

2. Let the CPPIB manage the investments: the investment geniuses that keep the $264 billion CPP fund buoyant with double digit returns while the rest of us are afraid to look at our investment statements, if we have any, should be asked to manage investments for the ORPP. Besides, they already manage external funds as part of their business. That would save more mega-millions from not having to set up a new investment body from scratch. Cost-free to Ottawa.

3. Encourage Other Provinces to Follow Suit: already Manitoba and PEI have said they would consider enacting parallel and reciprocal pension legislation. The rest were still hiding under their desks to see what would happen to Kathleen Wynne and Justin Trudeau for promoting this on the campaign trail. So clearing away the administrative and investment cost hurdles would give them all heart and start us off on providing national access to a supplementary pension.

4. Put CPP on the Agenda of the First Finance Ministers Meeting: Finance ministers normally meet in December and June to discuss the nation's finances. The last time CPP was on the agenda in December 2013, the junior Finance minister refused to discuss it. This infuriated the provincial finance ministers and spurred Kathleen Wynne to call an election and run on a made-in-Ontario pension plan. You can't change what you don't see or discuss, so get it on the agenda, ASAP. Besides PM-elect Trudeau promised to meet with the premiers within three months to talk CPP.

5. Convince Provinces to Support CPP Increase: under the CPP legislation, it takes two-thirds of the provinces with two-thirds of the population to amend the CPP plus federal agreement - harder than getting a Constitutional amendment. So the larger the provinces, Ontario, Quebec , BC and Alberta could effectively veto any change and in the past, they did. But now Premiers Wynne and Coulliard are BFFs and Premier Notley supported NDP leader Tom Mulcair who supports doubling the CPP. But all these breadcrumbs don't add up to a whole loaf unless they agree to a CPP increase at the same time! What if Notley has too much on her hands already? And if Quebec breaks ranks because it doesn't like the Energy East pipeline? Focus people! Focus!

6. Use Sunny Ways to Herd Cats: Provinces have different priorities at any given time.

One year Quebec and Alberta hinted they would not sign on. Another year, another provincial election brought Quebec into the fold but Alberta went offside. Eventually the smallest province PEI cajoled enough of the provinces to fulfill the amending formula but the federal government withheld consent. When feds took CPP off the table, even Alberta was miffed. And they were Tories, then! So if that federal veto was enough to bring the provinces together in protest, think what can be achieved with a little sugar - like maybe that infrastructure spending! Eh? Eh?

7. Make Use of Political Capital Already Spent: Kathleen Wynne ran an election on a new pension plan and won a majority. She doubled down on the pension issue while supporting PM-Elect Trudeau - which some pundits called a millstone around his neck. Some millstone! Some neck! PaceChurchill So now that there is clear electoral support for increasing CPP, let's get started. And not wait to fight this again in the next election.

8. Most of the work is done, just flip the switch: The federal and provincial bureaucrats have been working cooperatively behind the scenes on all the various pension intricacies which would make your eyes bleed. Workable models already exist as to how much to increase coverage and benefits- like the ORPP. All the federal foot-dragging and the headlines it generated has meant that the general public is more aware than ever about the need for a pension plan. There are still some zombie myths but some sunshine should take care of those!

9. No Time to Waste: the CPP legislation requires three years' notice to implement any change - even a good one. So even if the provinces were able to pause from elbowing each other for federal attention long enough to agree on a CPP increase this year, no change in contribution rates would take effect until 2019. And pension benefits won't increase materially until many years from then. So we have to get on it. We're not getting any younger!

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