The federal government and the provinces have been considering an increase to Canadian Pension Plan (CPP) and Quebec Pension Plan (QPP) benefits for some time…. But the majority of working Canadians don’t see this as their top choice for boosting retirement savings.
CPP/QPP increases would mean a significant premium hike for working Canadians and even more serious impacts for the economy.
Provincial governments will also have a big say in whether a CPP/QPP increase goes ahead. Tell them to stop the hike! The majority of Canadians are already struggling to save for retirement and simply can’t afford to keep this up.
The signs The proposal being considered by government would phase in increases over 10 years. The maximum annual premium would go up by about $2,200/year over that time, impacting all working Canadians...
Trouble for employees The employee portion of maximum annual CPP/QPP premiums would increase by about $1,100/year over 10 years.
Trouble for small business The employer portion would also increase by about $1,100/year per employee. That means a company with 15 employees would be paying an additional $16,500 per year. The self-employed, who pay the entire premium themselves, would be paying an additional $2,200/year.
Trouble for families A typical family of four is missing out on an extra $3,110 a year (where both parents are working) to put towards their own retirement. Why? Because public sector employees are currently compensated between 25 to 42 per cent above their private sector counterparts, making it a two-tiered system.
Trouble for the economy Higher labour costs, with no increase in productivity, would lead to job losses or reduced hours for many workers over the first 10 years of a CPP increase, and wages would go down by 1.5%. Many Canadians would go without work for years. Some might escape unscathed, but everyone would be at risk.
Heed the signs – help stop the CPP/QPP hike Your provincial governments will ultimately decide whether or not to go ahead with a CPP/QPP hike. Let them know that you’ve seen the signs, and they all point to trouble.