Finance Minister Wes Sheridan outlined his vision of reform of the Canada Pension Plan (CPP) at a luncheon event hosted in Charlottetown by the Atlantic Provinces Economic Council on Friday, Sept. 20. In his presentation, the Minister discussed his proposal to expand coverage and the progress being made by Canada's finance ministers to protect the income security of future generations.
Expert analysis indicates there is a pension crisis looming in Canada, due to a drop in the savings rate and a decline in private pension coverage. Approximately half of middle-income earners over 40 today expected to see a significant deterioration in their standard of living upon retirement.
Sheridan's proposed reforms focus on the middle class, intending to raise the replacement rate from 25% to 40% for those earning between $25,000 and the current ceiling of $51,000 through a gradual increase in contributions. Recognizing the burden for low-income Canadians, those making under $25,000 per year would not be required to contribute more.
In recent years Sheridan has taken a lead in promoting dialogue and meaningful CPP reform among Canada's finance ministers. His proposal will be discussed at a meeting of Canadian finance ministers later this fall. As finance minister, Sheridan is PEI's provincial steward of the CPP, and has been in this role for the past 6 years -- the longest serving provincial finance minister in Canada.
Sheridan's pension presentation was part of a luncheon hosted by APEC in conjunction with its annual general meeting. At its AGM APEC appointed a slate of new Governors to its board and outlined its research and outreach priorities for the coming year.