CANADA'S FINANCE MINISTERS PLAN FOR FISCAL CLIFF AND CPP EXPANSION

Dec 18, 2012

By Jane Brown

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Canada’s finance ministers say prudence is the key to Canada’s economic stability if the U-S economy goes over the fiscal cliff.  The consensus among the ministers meeting north of Ottawa on Monday, is for the federal government and the provinces to prepare for a fiscal shock by moving to balance their books.   If it’s not avoided by U.S. lawmakers, the so-called fiscal cliff involves a combination of stiff tax increases and deep spending cuts, which would kick in on January 1st.

Now to the latest on the future of your pension.  Finance Minister Jim Flaherty and his provincial counterparts have agreed to plan for the next six months in an effort to map out a strategy to expand the Canada Pension Plan.

Susan Eng is Vice President of CARP, A New Vision of Aging.  She tells Zoomer Media News what will take place over the next half year.  “They are going to talk about the so-called economic triggers and the definition of what means a modest improvement to CPP.  So, I guess we’re moving forward, just not now.  Eng says despite the delay, she’s encouraged that changes will be made to improve CPP.   She says CARP members want to see the percentage of pre-retirement income increased from 25 to 35-percent.  They also want the level of income to be hiked from $50,000 to $60,000 or $70,000.

Ontario Finance Minister Dwight Duncan has also been an advocate for expansion of the Canada Pension Plan.  He’s encouraged by progress in yesterday’s meetings,  and calls it important for the future of the economy.  “We’ve moved forward.  It’s still a little too slow for my tastes.  But, I think this allows us to move to the next step.”

Some of the provincial finance ministers along with Federal minister Flaherty remain concerned about increasing costs for employers at a time when the economic recovery is still fragile.

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