Archived - Harper Government Consults Canadians on Voluntary Supplement to the Canada Pension Plan
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Finance Minister rejects job-killing, mandatory payroll tax hike
July 13, 2015 – Ottawa, Ontario – Department of Finance
Finance Minister Joe Oliver today announced that the Government of Canada will consult with individuals, financial sector and retirement income experts, and stakeholders on options for a voluntary supplement to the Canada Pension Plan (CPP).
At the same time, Minister Oliver made clear that the Government will not impose a mandatory CPP premium increase on Canadians. Payroll tax hikes on workers and employers would kill jobs and be particularly damaging during a time of instability in the global economy. Such a tax hike would hit small business owners especially hard. It would also mean a serious cut in take-home pay for millions of hard-working Canadians. Rather, the Government will continue with its plan for low taxes, economic growth, a balanced budget and benefits provided directly to families.
The Harper Government is making it easier to save more for retirement:
- Introducing the Tax-Free Savings Account (TFSA), a way for Canadians to save tax-free for the priorities that matter to them. Economic Action Plan 2015 nearly doubled the TFSA annual contribution limit to $10,000, effective for 2015 and subsequent years.
- Increasing benefits through the Old Age Security (OAS) program’s Guaranteed Income Supplement (GIS) for Canada’s most vulnerable seniors. This investment of approximately $300 million each year improves the well-being of approximately 680,000 seniors across Canada.
- Implementing a framework for low-cost and large-scale Pooled Registered Pension Plans (PRPPs) for the more than 60 per cent of Canadians who do not have access to a private workplace pension plan.
- Canadians can be confident that the CPP will be there for them when they need it. The 26th Actuarial Report on the Canada Pension Plan has confirmed that it is sustainable for at least the next 75 years. Together, the CPP and OAS programs provided approximately $79 billion in 2013-14.
- Canada’s retirement income system is acknowledged to be among the world’s best, by groups like the OECD, in preventing poverty among seniors and ensuring appropriate income in retirement. According to a recent retirement study by McKinsey & Company, 83% of Canadians are on track for a comfortable retirement.
- The Canadian Federation of Independent Business surveyed its Ontario members in response to the Ontario Government’s plan to create its own pension plan. 69% of employers indicated they would have to freeze or cut salaries to afford payroll tax hikes. 53% said they would have to fire workers. 13% said they would have to close altogether.
“Our Government is taking action to give Canadians more options to save for retirement. We are exploring a voluntary CPP option that would build on past initiatives like creating TFSAs and enhancing GIS benefits. We believe in offering Canadians choice in retirement savings options. What we do not believe in are reckless tax hikes that would kill jobs at the very time when Canadians need more jobs, not less. Hiking payroll taxes would take money out of the pockets of hard working Canadian families that need the money to pay for basic necessities like groceries, gas and housing. Only Prime Minister Harper has the experience and good judgement needed to manage our economy. Under his strong leadership, we will continue cutting taxes and creating jobs.”
- Joe Oliver, Minister of Finance
“Our Government believes in providing voluntary savings options to serve Canadians. We will not consider a one-size fits all approach to force payroll taxes on small businesses and employees. Our Government’s approach is to lower taxes, create jobs, and build the economy while putting more money back in the pockets of Canadians.”
- Kevin Sorenson, Minister of State (Finance)
Director of Communications
Office of the Minister of Finance
Department of Finance