Archived - Government Introduces Legislation for a Stronger Canada Pension Plan and a More Secure Retirement for Canadians

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October 6, 2016 – Ottawa, Ontario – Department of Finance Canada

Middle class Canadians are working harder than ever, but many are worried that they won’t have enough put away for their retirement. One in four families approaching retirement—1.1 million families—are at risk of not saving enough. That’s why the Government of Canada is committed to helping Canadians achieve their goal of a safe, secure and dignified retirement, and has worked with the provinces and territories to strengthen the Canada Pension Plan (CPP).

Canada’s governments agreed on June 20, 2016 to enhance the CPP to give Canadians a more generous public pension that will help them retire in dignity. All nine CPP participating provinces have now confirmed their support for the agreement concluded on June 20, 2016 in Vancouver.

On behalf of Minister of Finance Bill Morneau, Minister of Families, Children and Social Development Jean-Yves Duclos today introduced legislation in Parliament that, upon receiving Royal Assent, will mark a major step towards making this commitment a reality. By implementing the agreed-upon enhancement, Parliamentarians will be ensuring that future generations of Canadians can count on a more generous public pension in their retirement years.

The enhancement that Canada’s governments have agreed to does two things to make this happen for contributors. First, it will increase the share of annual earnings received during retirement from one-quarter to one-third. This means that an individual making $50,000 a year in today’s dollars over their working life will receive about $16,000 per year in retirement instead of roughly $12,000 today. Second, it will increase by 14 per cent the maximum income range covered by the CPP. The legislation also includes enhancements to CPP disability and survivor benefits that are proportional to the enhanced contributions going forward.

To make sure that individuals and their employers have time to adjust, increased annual CPP contributions will be phased in slowly over seven years—from 2019 to 2025—so that their impact is small and gradual.


“By supporting today’s legislation, Parliamentarians will boost how much each Canadian will get from their CPP pension in the future. This will significantly reduce the share of families at risk of not saving enough for retirement and the degree of under-saving. In short, there will be more money from the CPP waiting for Canadians when they retire, so they can focus on the things that matter—like spending time with their family—rather than on worrying about making ends meet. I would like to once again thank Canada’s governments for working together in pursuit of this achievement, and I am proud to have been part of these efforts. Together, we have proved that better is always possible when a renewed spirit of collaboration is put to work on behalf of all Canadians.”

- Bill Morneau, Minister of Finance

“This new legislation is an important step to help Canadians achieve their goal of a safe, secure and dignified retirement. An enhanced CPP will improve the retirement income security of workers and their families, and will do so through an efficient and effective way to prepare for retirement. I would like to thank my colleague, the Minister of Finance Bill Morneau, and our fellow Ministers across Canada, who worked together to introduce this enhancement to benefit hard-working Canadians.”

- Jean-Yves Duclos, Minister of Families, Children and Social Development

Quick Facts

  • Once fully phased in, the CPP enhancement will increase CPP benefits by as much as 50 per cent.
  • The CPP provides a secure, predictable benefit, which means that Canadians can worry less about outliving their savings, or having their savings impacted by significant market downturns. 
  • CPP benefits are fully indexed to prices, which reduces the risk that inflation will gradually erode the purchasing power of retirement savings.
  • The CPP is a good fit for Canada’s changing job market. It helps to fill the gap left by declining workplace pension coverage, and it is portable across jobs and provinces, which promotes labour mobility.
  • The CPP is a large program with millions of contributors, which allows the CPP Investment Board to take advantage of economies of scale in order to deliver strong net returns.
  • With the automatic collection of contributions for all workers, the CPP is a simple way to save.

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Associated Links

Media Contacts

Annie Donolo
Press Secretary
Office of the Minister of Finance

Media Relations
Department of Finance Canada

Mathieu Filion
Director of Communications
Office of the Hon. Jean-Yves Duclos, P.C., M.P.
Minister of Families, Children and Social Development

Media Relations Office
Employment and Social Development Canada

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