More than 90% of Canadian families with children will pay more once Canada Pension Plan (CPP) increases are fully implemented, finds a new study by the Fraser Institute.

The first of seven increases to what the institute calls the “CPP tax” starts January 2019. (In the study, the institute acknowledges that some may not view CPP contributions as a tax. It says its definition of a tax is “a compulsory contribution for the support of government facilities, programs or services.”) The increases will be fully implemented in 2025.

The study measures the impact of the fully implemented CPP increases, as well as the government’s personal income tax changes already in place, on the taxes that Canadian families will pay. (A family is defined as a parent or parents with a child or children under age 18.)

The study finds that once fully implemented, virtually all (almost 99%) middle-income Canadian fami­lies with children (incomes ranging from $77,839 to $110,201) will pay more—on average, $2,260 more each year.

When looking at all families with children in Canada (excluding Quebec) regardless of income, about 92% will pay more—about $2,218 more each year.

Read the full study.

This post was updated on Jan. 11, 2018, to reflect the Fraser Institute’s definition of tax.

Also read:

Tax changes to look for in budget 2018

Is being a single-income household financially feasible?

Shedding light on the CPP survivor benefit

Originally published on Advisor.ca
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Before this change, the combined employer and employee contributions add up to about 15% of payroll and the benefits are inadequate. Anyone paying 15% into his/her own plans would have an adequate nest egg for retirement. It is wrong and unfair to confiscate that nest egg upon death as the CPP does. The CPP should be a compulsory locked-in self-administered RRSP. The residual should pass to the survivor. The CPP is a scam.

Friday, Jan 12, 2018 at 7:43 pm Reply

Richard Duy

Yes, it sounds like a lot of money however, I will guarantee when these folks face Retirement age they will be very pleased that over the years they invested wisely in their Retirement.

Friday, Jan 12, 2018 at 6:54 pm Reply

Frank Wiginton

Ummm… CPP is not a tax. These are contributions to a pension that will pay them money in the future. The CPP ‘CONTRIBUTIONS’ are taken off your pay BEFORE income taxes are calculated to deducted from your pay cheque. Maybe greater clarity could be added to this article?

Thursday, Jan 11, 2018 at 3:10 pm Reply

George Li

You are paying for something that is not guaranteed to get back and it is mandatory, so it is like tax. I understand your point that CPP is deducted and tax credit is given, however, it reduces overall disposable income of the Canadian middle class, exactly the opposite of what Trudeau said before he was elected.

Wednesday, Feb 7, 2018 at 1:14 pm