Small business disappointed as BC signs on to deal to hike CPP premiums

Near 70 per cent of business owners may have to freeze or reduce wages

OTTAWA, October 4, 2016 – The Canadian Federation of Independent Business (CFIB) was disappointed by today’s announcement by the BC government that it has signed on to a mandatory expansion of the Canada Pension Plan (CPP), which comes with added costs for small businesses and their workers. BC now joins the federal and provincial governments – outside of Quebec – in giving the green light to CPP expansion across Canada.

“Given the federal budget commitment to consult before expanding CPP, small business owners expected an opportunity to express their views prior to a final decision. Unfortunately, only the government of British Columbia, soon to be joined by Quebec, gave their residents that opportunity,” said CFIB president Dan Kelly.

Most Canadians don’t know how the CPP works or what proposed expansion would mean. When presented with the details about the size of the proposed CPP tax increase, 69 per cent of business owners said they may need to freeze salaries and benefits to accommodate the hike, and more than a third said they may have to eliminate jobs.

Canadians don’t know what CPP changes will mean for them
According to an Ipsos poll of more than 2,000 employed or retired Canadians conducted in late August, 39 per cent of Canadians falsely believe the government pays for part of their CPP, only 26 per cent know it will take approximately 40 years to fully phase in expanded benefits, and 71 per cent do not realize current retirees get nothing. “While we fully appreciate that Canadians support the concept of additional CPP benefits, no one has informed them that there is likely to be a secondary effect on their wages,” Kelly added. The Ipsos poll reveals Canadian workers overwhelmingly oppose CPP expansion if it results in a cut – or even a freeze – in their wages.

Now is not the time for a payroll tax hike
“With a flat economy and yesterday’s announcement of five years of increasing carbon taxes/pricing, I’m not sure where our governments think small business owners and employees will find the money to pay for seven years of CPP hikes,” Kelly concluded.

CFIB is concerned that increasing CPP will make it even more difficult for SMEs to continue to grow Canada’s economy. CFIB is calling on the federal government to reinstate its promise to cut the small business corporate tax rate to nine percent. CFIB is asking the federal and provincial governments for further actions, including a freeze in the minimum wage and lower payroll taxes like Employment Insurance and workers’ compensation premiums.

To arrange a media interview with Dan Kelly, please contact Kiara Morrissey at 416-222-8022, 647-464-2814 or More information about CFIB is available at

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