VANCOUVER (Reuters) - Any increase to Canada Pension Plan contributions will be "modest" to protect the economy as Ottawa looks to push Canadians to save more for retirement, Finance Minister Jim Flaherty said on Friday.

Flaherty plans to press provincial finance ministers next week to support his plan for a "modest, phased-in and fully funded" expansion of benefits under the public pension plan, as well as ideas to promote increased private savings.

Flaherty outlined his ideas in a letter to provincial officials on Thursday, but the suggestion for the Canada Pension Plan quickly came under attack from a business group that warned that increases would hurt the economy.

"The use of the word modest is entirely intentional. We have no intention of causing hardship in the Canadian economy," Flaherty told reporters in Vancouver following a speech to a luncheon of financial analysts.

The federal finance minister is scheduled to meet with this provincial and territorial counterparts on Sunday and Monday in Prince Edward Island.

Currently, employees and employers pay a combined 9.9 percent of a worker's pay into the CPP and the Quebec Pension Plan on income of between C$3,500 and just over C$47,000. The fund pays out pensions to retirees, starting at age 60, as well as disability and survivor benefits.

Any changes to the CPP by the federal Conservative government would require provincial support, and Flaherty said any changes would take "a long time" to work their way through to a final agreement.

Flaherty told the provincial ministers that more had to be done to encourage private savings through tax changes, and the financial sector should be allowed to offer "broad-based defined-contribution pension arrangements to multiple employers, all employees and the self-employed."

But he also wrote that he was worried that even with those changes "some Canadians may not save enough for retirement", adding there was wide public support for strengthening the CPP system.