Put CPP hikes on hold, says CFIB

Starting in 2019, the Canada Pension Plan (CPP) will be gradually enhanced, with higher contributions resulting in higher benefits.

Faced with increased CPP contributions, small business owners in Ontario are asking the newly elected Ontario government to put the plan on hold or cancel it.

Read: Canadians underestimate retirement costs: study

In total, 84% of Ontario business owners want the government to delay CPP expansion, with 52% wanting a review of other options, and 32% wanting the government to withdraw its support, finds a survey from the Canadian Federation of Independent Business (CFIB).

Since CPP changes require the support of two-thirds of the provinces representing two-thirds of the population, Ontario has an effective veto as Canada’s largest province, CFIB argues in a release.

“Many Ontario small businesses are struggling with the legacy of high costs imposed by past decisions,” says Plamen Petkov, CFIB’s vice-president for Ontario, in the release. “Massive hikes in the costs of energy, the minimum wage and new labour rules will have negative effects for many years, and small firms simply cannot afford to pay even higher payroll taxes.”

A CFIB study finds that the CPP changes will initially mean 64,000 fewer jobs, a loss 4.5 times greater than the federal government’s projection.

The federation says there are less harmful ways to improve retirement savings for employees, including pooled registered pension plans (PRPPs), and it says it’s ready to work with the Ontario government to review options.

About the CFIB poll: Results were pulled from a survey that received 2,065 responses from business owners located in Ontario. The responses are statistically accurate within +/- 2.2 percentage points, 19 times out of 20. Survey results were collected between July 18 and 20, 2018.

Also read:

Advice for an active senior facing longevity risk

Retirement planning cheaper if CPP and QPP deferred longer: C.D. Howe

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.