Expanding the Canada Pension Plan: Myths Debunked

December 18, 2015

[[{“fid”:”498″,”view_mode”:”default”,”fields”:{“format”:”default”,”field_file_image_alt_text[und][0][value]”:”coins”,”field_file_image_title_text[und][0][value]”:”coins”},”type”:”media”,”link_text”:null,”attributes”:{“alt”:”coins”,”title”:”coins”,”height”:”401″,”width”:”532″,”class”:”media-element file-default”}}]]

Myth #1: The economy is too fragile to increase CPP contributions now

The last time CPP contributions were increased was 1997. During the entire seven years the increase was phased in, employment rose and the economy steadily grew – and that time benefits to workers weren’t even increased. 

Myth #2: The Canada Pension Plan is a job-killing tax. 

CPP contributions are not a tax. They are savings put aside in return for a pension benefit in retirement. They are an investment by workers and their employers into a pension plan that is safe and sound. The savings in the CPP will eventually be spent in 10, 20 and 30 years, and will help create jobs in the future.

Corporations have more than enough room to contribute to expanding the CPP, which will provide greater future retirement benefits for today’s workers. Companies outside the banking industry have seven times as much cash in the bank than they did last time CPP contributions were raised. Businesses’ income tax has also dropped 13 percentage points since the 1990s.

Myth #3: Millions of jobs will be lost if CPP premiums are increased.

Increasing CPP premiums has never cost us jobs. In fact, people with better pensions will be able to spend more in their retirement – and that spending creates jobs. 

Myth #4: Small businesses are against an expansion of CPP.

Small businesses know that CPP is the best value for their money with its low management costs, portability and security. As self-employed workers, owners are contributing and benefiting from CPP. Expanding the CPP gives small business owners the risk-free stability of a defined-contribution savings plan, and a guaranteed defined-benefit pension plan for their workers. A poll of small businesses in Ontario showed that a majority of small and medium-sized businesses favoured an expanded CPP.

Related Articles

Let’s grasp this opportunity to shape a fair Canada for everyone

By Hassan Yussuff, as published in The Hill Times. Across the generations, our loved ones are anxious about the future. Polls show that millions of Canadians are worried about the rising cost of living, the increasing precarity of work, climate change, and so much more. The newly elected federal government has a lot to do to alleviate these types of…
Read More

Unions mark Gender Equality Week with election demands

Canada’s unions are marking Gender Equality Week 2019 by calling on federal political parties to commit to creating a fair Canada for everyone. “Gender Equality Week was created to celebrate recent gains while reflecting on the work that needs to be done to improve gender equality and women’s rights across Canada,” said Marie Clarke Walker, Secretary-Treasurer of the Canadian Labour…
Read More

Working families have a lot at stake this election

By Hassan Yussuff You can be forgiven if you’ve avoided thinking about the upcoming federal election all summer, but Labour Day is here. That means it’s time to return to the fall routine and start thinking about how you are going to cast your ballot. You may have seen politicians working the barbecue circuit, vying for the support of workers…
Read More