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Finance Ministers ignore warning signs and move to hike CPP in SK

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CFIB disappointed Saskatchewan government says ‘Yes’ to payroll tax hike

Regina, June 21, 2016 – Canada’s finance ministers decided to hit small business owners with another tax yesterday, with an agreement in principle to expand the Canada Pension Plan (CPP), a devastating move for Canadian workers and the economy in general.

“It is tremendously disappointing to see that finance ministers are putting Canadian wages, hours and jobs in jeopardy and willfully moving to make an already shaky economy even worse,” said CFIB president Dan Kelly. “Despite all the talk, it appears that jobs and the economy are not particularly high priorities for the governments that have signed off on this deal.”

Reports suggest Manitoba and Quebec have not agreed with the plan.

The agreement in principle will see a CPP hike phased in between 2019 and 2025. Contributions will increase to cover 33 per cent of income, up from 25 per cent under the current system. The earnings threshold will increase to $82,700 by 2025.

“Entrepreneurs were counting on the Saskatchewan government to show strong leadership and say no to CPP hikes. We are frustrated the government’s position changed,” added Marilyn Braun-Pollon, CFIB vice-president, Prairie & Agri-business. Just last week the Saskatchewan Finance Minister stated in a letter to CFIB, “With regards to the recent CPP discussions, our Government prefers voluntary efforts to improve retirement savings over mandatory solutions such as an enhancement to the CPP.”

“We are also puzzled why the majority of Finance ministers are ignoring broad opposition from business owners and working Canadians alike. The last thing Saskatchewan businesses need is a payroll tax hike, which will impact their business and certainly affect their employees,” noted Braun-Pollon. In fact, CFIB’s latest survey found that 78 per cent of Saskatchewan small business owners (71% nationally) oppose a mandatory premium hike. Fewer than one-in-five Canadians chose CPP as the best vehicle for their savings.

No consultations?

“What’s worse, it appears governments aren’t even bothering to consult Canadians on the move – even when an Angus Reid poll shows that less than 10 per cent are following the issue,” added Kelly.

Lone positive: Ontario Retirement Pension Plan is dead

“The only positive to come out of this process is that the ORPP – the CPP’s far uglier cousin – won’t come to fruition,” said Kelly. “It’s a shame that Ontario spent millions of dollars to effectively bully the smaller provinces to force their pension agenda.”

Impact on small businesses

  • 78 per cent of Saskatchewan small business owners (71% nationally) oppose a mandatory premium hike, according to CFIB’s latest survey
  • 62 say it would increase pressure to freeze or cut salaries
  • 44 per cent say they would reduce investment in their business
  • 27 per cent say it would force them to lay off employees

 

To arrange an interview with Dan Kelly, please contact Ryan Mallough at 416-222-8022, 647-464-2814 or [email protected].

To arrange an interview with Marilyn Braun-Pollon, CFIB’s Vice-President Prairie & Agri-business, please call (306) 757-0000, 1-888-234-2232 or email [email protected]. Follow CFIB Saskatchewan on Twitter @cfibsk.

CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members (5,250 in Saskatchewan) across every sector and region.