Canada’s finance ministers met in Vancouver on Monday to discuss revamping the Canada Pension Plan (CPP). The agreement in principle will see an increase in premiums phased-in starting at $7/month in 2019 and $34/month by 2023.
Once the plan is fully implemented, the maximum annual benefits would increase by about one-third, from $13,000 to around $17,000.
Not every province must have the CPP; Quebec has their own pension plan, as does Saskatchewan. Both Manitoba and Quebec did not sign on to Monday’s deal.
Ontario had planned to launch its own pension plan–the Ontario Retirement Pension Plan (ORPP) if changes were not made to the CPP, but with this agreement, the ORPP will likely be scrapped.
A change to the CPP requires the consent of Ottawa as well as a minimum of seven provinces. The provinces have until July 15th 2016 to officially sign on to the agreement before it becomes formalized.
CPP premiums have only been raised once in the last two decades.