The Canadian Federation of Independent Business (CFIB) is launching a campaign to combat the country’s “looming pension crisis,” it said.
Changing the Canada Pension Plan (CPP) / Quebec Pension Plan (QPP) formula in order to give Canadians double the benefits will cost small business owners and their employees in the form of a massive increase in premiums, said the CFIB.
The pension “crisis lies in unsustainable public sector pension commitments and the lack of fairness in the Canadian pension system overall,” said CFIB.
According to CFIB, a mandatory increase in CPP/QPP premiums means:
•higher payroll taxes that will kill jobs and reduce wages
•having the employee and employer each paying an additional $1,300 per year
•for most Canadians working today, a negligible difference in realized CPP/QPP benefits as even the unions admit it will be 40 years before CPP/QPP benefits are doubled
•inevitable tax hikes to cover the cost of public sector pensions as changing demographics leads to fewer workers supporting more retirees
•no relief from the estimated more than $200 billion unfunded liability currently looming within the federal public sector pension structure.
Canada's retirement income system can be fixed without mandatory CPP/QPP increases through:
•better voluntary pension plans for small business such as pooled registered pension plan (PRPP)
•eliminating the gap between the private and public sector pensions by putting new civil servants on a less costly defined contribution plan
•ensuring the number of working years is the same as the private sector.