The province has released details of its proposed enhancements to the Canada Pension Plan (CPP) Agreement in Principle (AIP) tabled at a recent meeting of federal, provincial and territorial finance ministers. This statement was made by Premier Brian Pallister.
“Our proposals would make the CPP more responsive to the realities of the generation to come,” said Pallister. “The near federal-provincial consensus of the desirability of affordable CPP enhancement gives us a unique opportunity to get this right.”
Manitoba’s proposals include the following:
- Consider low-income single seniors. Given the special circumstances facing single seniors, Manitoba would like the federal government to consider eliminating the claw back of guaranteed income supplement payments for widowed seniors’ CPP survivor benefits.
- Indexation of the death benefit. Currently the CPP death benefit provides a maximum one-time payment of $2,500 to the estate of a deceased CPP contributor. This maximum was set in 1997 and frozen, substantially reducing the value of the benefit over time. Manitoba believes the maximum death benefit should begin to grow with inflation as part of this CPP enhancement.
- Enhance affordability through extension of phase-in of the upper earnings limit. The current proposal allows five years for the phase-in of the increase in the contribution rates up to the current upper earning threshold. Given the magnitude of the increase in contributions related to enhancing the year’s maximum pensionable earnings (YMPE), Manitoba believes a similar amount of time should be provided to adjust to this change. Therefore, it is proposed the phase-in of the enhanced YMPE should be increased to four years from two.
- Commit to a comprehensive review of the other CPP benefits. While it is assumed that all CPP benefits, including survivor and disability benefits, will be increased in proportion to the enhancements outlined in the current approach, this should be explicitly stated in the AIP.
These proposals would augment the Agreement in Principle discussed in Vancouver and have been received with interest and support by other jurisdictions, said Finance Minister Cameron Friesen.
“CPP is a key pillar to retirement security for Manitobans and Canadians, but it is not the entire solution,” said Friesen. “This is a once-in-our-lifetime chance to modernize the CPP, to make it more compassionate and more responsive to the changing needs of Canadians.”
