PARLIAMENT HILL, Ottawa—Finance Minister Jim Flaherty says he has two priorities for the finance ministers’ meeting with his provincial and territorial counterparts in Kananaskis, Alberta, next Monday: targets to get budgets balanced and a new private-sector pension plan.
Flaherty says he is proud of how provincial and territorial governments worked with the feds to keep Canadians working as the world was sucked into an an economic tailspin, but now it is time to get the books in order.
Stimulus packages are now being winded down in a way that accounts for the fragile state of the global economy, he said.
“This will allow us to sustain the recovery and protect the jobs of Canadians.”
But now is the time to shift their attention to the next critical task—eliminating deficits. He hopes Kananaskis will result in targets for balancing all federal, provincial, and territorial budgets.
“The earlier we can get rid of our deficits, the better,” said Flaherty.
He said the provinces and territories have already started work on a framework for a new style of pension plan, called a pooled registered pension plan (PRPP).
“These plans will be a major breakthrough for the Canadian pension market. They will make good, regulated, low-cost, high-security pension plans accessible to millions of Canadians who up to now have not had access to such plans.”
He noted that many employees of small and medium-sized businesses and self-employed people will have access to a real pension plan for the first time if the plan goes ahead, and large employers who have not previously offered pension plans because of cost concerns may now do so.
The new plans would be offered by insurance companies and paid for by employees who can opt out if they don’t want to participate.
Flaherty says the other option, a supplemental public system being called for by the federal Liberals, won’t work as well.
“I am surprised the federal Liberals are still pushing for that.”
Flaherty says that at the previous finance ministers’ meeting on Prince Edward Island, all the ministers rejected that plan.
Flaherty says our private sector financial institutions can do a better job than a “massive new government bureaucracy.”
“Pooled registered pension plans will be the biggest step forward for Canadian retirement savings since our government created the tax-free savings account.”
He says there needs to be a lot of work over the coming year to make the new plan come to fruition, including changes to laws and regulations at both the provincial and federal levels.
“That said, I am hoping ministers at Kananaskis will endorse the PRPP model and agree to expedite work to implement that.”
If that happens, he says the meeting will have been a success.
