August 1998
AN OPEN LETTER ABOUT THE CANADA PENSION PLAN TO
PIERRE PETTIGREW, MINISTER OF HUMAN RESOURCES DEVELOPMENT,
AND PAUL MARTIN, MINISTER OF FINANCE
Dear Ministers:
As you know, the National Council of Welfare is a long-standing
supporter of the Canada Pension Plan as one of the main pillars of our
retirement income system. The CPP and its sister plan, the Quebec
Pension Plan, cover virtually all members of the paid labour force, and
they stay with workers whenever they change jobs. The plans provide
retirement income, disability benefits and survivor's benefits to
millions of Canadians. They make special provisions for parents who
take time out of the paid labour force while their children are young.
Benefits paid by the plans are fully indexed to increases in the cost of
living.
The Council has published a number of reports over the years about ways
of making the Canada Pension Plan even better. The most recent report,
Improving the Canada Pension Plan, was published in the fall of 1996.
The report took a firm stand against cuts in CPP or QPP benefits and
urged governments to explore options for improving benefits. It also
called on governments to open up future meetings on the Canada Pension
Plan so that ordinary people can see what kind of changes their elected
representatives support.
This letter is about the process of CPP reform. Because of widespread
public interest in pension issues, we decided to present our proposals
to you in the form of an open letter.
The Canada Pension Plan is run by governments, but it is not financed
with government money. Money for the plan comes from workers and
employers, and governments are only stewards of that money. Because of
this, it seems only fair that workers and employers should have a huge
say in how the plan evolves. And it seems reasonable to expect that
governments should listen to what workers and employers are saying.
Here are our proposals for the next round of CPP reforms:
1. As soon as possible after the publication of the next actuarial
report on the Canada Pension Plan, the government of Canada and
provincial governments should invite proposals from all interested
parties for consideration in the next round of CPP changes.
2. The government of Canada should select a representative sample of
the proposals and assess their impact on the plan as a whole and on
individual Canadians. The last consultation paper on the Canada Pension
Plan in 1996 contained a number of proposals to cut benefits, but not
one single proposal for improving benefits. As you know, our Council
was one of the few groups that suggested ways of improving CPP benefits
in 1996.
3. The proposals selected for further study should be costed by the
Office of the Superintendent of Financial Institutions to show their
effect on employer and worker contribution rates during the next 30
years. They should also be studied by Human Resources Development
Canada and Status of Women Canada to determine their impact on different
groups of beneficiaries, both now and in the future. The last
consultation paper had virtually no information on the impact of
proposed cuts on individuals. The paper also breached the federal
government's own guidelines that require an analysis of the impact of
all new programs on both women and men.
4. Information about the impact of possible changes should be published
by governments as part of a CPP discussion paper.
5. Parliament and provincial legislatures should set aside ample time
for public hearings on the discussion paper. Interested parties should
be given ample time to prepare for the hearings.
6. Each government should publish its recommendations following the
public hearings and prior to the opening of federal-provincial talks on
the Canada Pension Plan.
7. Federal-provincial meetings on the Canada Pension Plan should be
open to the public so that all Canadians can see what kind of changes in
the CPP are on the table and what changes their elected representatives
are prepared to support.
8. The Minister of Human Resources Development, his officials, and
their provincial counterparts should take the lead in negotiations
concerning Canada Pension Plan benefits. The Minister of Finance, his
officials, and their provincial counterparts should concern themselves
primarily with the financial soundness of the CPP and alternative
scenarios for structuring contribution rates.
Because we would like to see a full and wide-ranging debate on the
Canada Pension Plan before the next round of changes, we are
distributing copies of this letter to members of Parliament, members of
the Parliamentary Press Gallery, provincial governments, and the 10,000
individuals and groups on our mailing list.
We understand that the next actuarial report on the Canada Pension Plan
is scheduled to be tabled in Parliament by the end of 1998. If
governments start preparations without delay, there should be sufficient
time to follow the steps we have suggested.
We hope you will find our proposals worthy of consideration. We will be
in touch with you shortly to arrange a time later in the summer to
discuss the proposals in more detail.
Sincerely yours,
John Murphy
Chairperson
--
Joanne Roulston, M.S.W.
Senior Researcher and Policy Advisor/
Conseillère principale en politiques et recherche
National Council of Welfare/Conseil national du bien-être social
Government of Canada/Gouvernement du Canada
1010, rue Somerset Street West/ouest, Ottawa, Ontario K1A 0J9
phone (613) 957-0679, fax/télécopieur (613) 957-0680
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