We've heard it time and time again: Canadians just aren't saving enough for retirement.

In capitals across the country, the fear is that many of the growing number of baby boomers settling into retirement face an uncertain financial future.

But while the country's finance ministers can agree on the demographic challenge, there's only a sliver of common ground on how to solve it as they prepare to meet Monday at Meech Lake.

Ontario and a handful of other provinces want to enhance the Canada Pension Plan, increasing the premiums paid now for higher payouts upon retirement.

Alberta, on the other hand, prefers pooled registered pension plans, voluntary programs that employees can use to supplement their retirement savings. Quebec already took a similar approach, approving the Voluntary Retirement Savings Plan earlier this month.

Where does Ottawa stand? Well, with a foot on both sides of the retirement fence, it would seem.

Finance Minister Jim Flaherty isn't exactly saying no to enhancing the CPP. But he insists global economic recovery remains too fragile to increase the CPP payroll tax imposed equally on workers and their employers.

His junior finance minister is more absolute. Kevin Sorenson penned an op-ed piece this week warning of dire consequences if premiums are increased, including the loss of 50,000 jobs.

"Families and the Canadian economy cannot afford a dramatic expansion to the Canadian Pension Plan that will take more money out of the pockets of employees, and force employers to cut jobs, hours and wages," Sorenson wrote.

Cue the alarm bells at the Canadian Federation of Independent Business. The association, which represents thousands of small business owners across the country, released a public opinion poll this week that suggests a majority of Canadians oppose mandatory CPP increases.

At the other end of the spectrum is the Canadian Association of Retired Persons, known as CARP. It says 12 million Canadians, nearly two-thirds of the workforce, do not have a private pension plan. Many of them have no other source of retirement income than the Canada Pension Plan.

On Friday, CARP sent out a news release warning the federal government that its members will not tolerate inaction. It said seniors, as a group, are very active voters and their numbers are growing every year.

"Action on CPP is a ballot-box issue and [CARP members] will be watching closely what happens at Meech Lake," the release said.

Forced to save

Supporters of increasing premiums rely on one basic argument. CPP is a mandatory program. Voluntary plans, such as those favoured by Ottawa and Alberta, will not do the job. They argue few Canadians contribute to RRSPs, and even fewer contribute the maximum.

The evidence bears them out. Statistics Canada reports only a quarter of Canadians contribute to RRSPs, and of those, only a fraction put in the maximum allowed.

Retirement

The federal government's about-face on Canada Pension Plan reform may seem like it came out of nowhere, but the move is being positioned as just one more way for Canadians to save for retirement. (Ryan Remiorz/Canadian Press)

There's a similarly low participation rate for Tax-Free Savings Account. The consulting firm Investor Economics has reported the average TFSA account contained just $7,400 in 2012.

In other words, Canadians won't save for retirement unless they're forced to. Expanding the Canada Pension Plan guarantees a better retirement income in the future for every Canadian.

If that's the case, Jim Flaherty needs to answer a basic question on Monday when he meets with his provincial counterparts. If not now, when will the economy be sufficiently robust to allow for an increase in CPP premiums?

The truth is, it's never a good time to talk about increasing premiums.

When Paul Martin was federal finance minister in the late 1990s, he and his provincial counterparts set aside political and ideological differences to put the Canada Pension Plan on a sustainable footing. Had they not acted to increase premiums then, the plan wouldn't be around at all for those Canadians reaching retirement age today.

The situation now may not be as serious, after all the Canada Pension Plan is on solid financial footing. But supporters of a premium hike insist that doesn’t make it any less urgent for Canadians heading into their golden years.

$12,000 a year not enough

The CPP now provides Canadians with a maximum income of $12,000 a year. Lower-income earners are also eligible for Old Age Security and the poorest seniors also qualify for the Guaranteed Income Supplement.

New Democrat Murray Rankin argues the amounts are far too low when so few Canadians have a private pension, and when half a million retirees already live in poverty.

"These numbers tell a story of an increasingly insecure retirement future for Canadians," Rankin told the House of Commons this week in kicking off debate on an NDP motion calling for an immediate phasing in of increases to the CPP.

"It is clear that if we do not act to secure pensions, the very stability of Canada's economic future is at risk."

The federal Conservatives say Rankin's rhetoric is alarmist, and based on assumptions rather than fact.

Cabinet minister Michelle Rempel says that, at the very least, policy-makers need more detailed studies to identify how much premiums would need to increase and over what period of time, to provide more substantial retirement benefits.

"I would love to hear some details, some actual economic modelling information, on why this is a good proposal," she told the Commons. "Convince us that increasing CPP premiums right now is something that is sustainable in the long term and is not going to hurt job creation."

It's a fair enough question.

But for a federal government that argues Canadians don’t save enough already, and with the evidence that most aren’t contributing anything to RRSPs, expecting people to voluntarily contribute more to some new retirement account seems both illogical and unlikely to succeed.

Of course, that's the long view, the view most politicians never enjoy.

The short view is how it will impact the governments that Flaherty and his provincial colleagues represent around that table on Monday. What they see from there will determine the direction they take.