St. Albert MP Michael Cooper is not pleased about the recent modifications to the Canada Pension Plan.
Cooper has received feedback from hundreds of people and he says at least 80 per cent of the respondents are expressing displeasure with the changes to the system.
“I think that this saw a high response because it’s an issue that effects everyone and it’s a policy that people don’t want,” Cooper said.
The finance department has decided to expand the program because they say Canadians are struggling to save enough for retirement. The department estimates that 1.1 million families, or a quarter of all Canadian families, are having trouble putting away money for retirement.
Copper says that between Guaranteed Income Supplement (GSI), tax free savings accounts and the current CPP program, there is enough support for pensioners and that Canadians are able to manage their own money.
The proposed changes to the CPP will not begin to take effect until 2019 and won’t be in full swing until 2025.
Under the new program, mandatory contributions to CPP will increase so that future retirees will receive the benefits of higher payouts.
Once the plan is fully implemented, Canadians would pay between $9 and $42 more into the program every two weeks.
The payout for Canadians would expand the benefits pensioners receive, and give a maximum annual benefit of $20,000, up from the current $13,000. The changes will provide future retirees with one-third of their average annual income, up from the one-quarter they currently receive.
Cooper doesn’t think that Canadians need to see changes to a system that is already working well.
“Canada’s retirement system is the envy of the world,” Cooper said. “We’ve seen poverty among seniors dropping significantly in recent years. Canadians are saving more for retirement than ever before.”
Small businesses will also be paying more with mandatory matching contributions increasing along with contributions individuals will make.
“Its going to take a lot of money out of the wallets of hardworking Canadians and businesses who are going to have to pay for this,” Cooper said. “It’s going to put jobs at risk and it’s not going to help seniors who need help.”
Part of the proposal is to provide tax deductions, rather than a tax credit, on the increase in contributions made by employees. The government expects this change to reduce government revenues by around $710 million by 2022.
CPP tax rates have only been raised once in the last 20 years. In 1997 the CPP system was altered so one generation of workers was not paying for another generation’s retirement.
Cooper says that if his party is elected in 2019 they will reverse the proposed changes.
