Increasing Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) benefits would hurt the economy, according to a report by the Canadian Federation of Independent Business (CFIB).

Next month, provincial finance ministers will discuss C/QPP expansion.

The organization says one of the options under consideration would cost employees up to $1,100 more per year, bring employment growth to a halt, and cut wages by 1.5%.

“There’s been lots of talk about increasing benefits with very little mention of the cost,” says Ted Mallett, the CFIB’s vice-president and chief economist. “The short-term impacts are substantial, yet benefits could take decades to be fully implemented.”

The CFIB is Canada’s largest association of small- and medium-size businesses with 109,000 members across the country.

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Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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Mike Murphy:

If the government improved OAS and GIS for seniors to take effect now, independent businesses would receive a lion’s share of these increases and the economic activity would actually increase.

I disagree with CFIB’s view that improvements to CPP/QPP will hurt the economy. Employees will not have to put as much aside in RSPPs so the net effect on contributions overall will be little if any. The only businesses that will loose are the banks and investment firms that are still making enormous profits on the fees they charge.

While improvements to CPP/QPP will take longer to realize and the increased cost for both employees and employers would take effect immediately, the long term positive affect for small businesses will out weigh any short term economic one.

Independent businesses will do much better in the longer term as seniors with improved CPP/QPP will be spending the extra and contributing more to the economy in their communities.

Thursday, May 02 at 1:58 pm | Reply

Derek Fudge:

CFIB has no credibility on this issue. It’s just pulling numbers out of a hat. I like to see the research CFIB is relying on. It certainly contradicts the evidence from the last time CPP premiums were raised when it was shown to have absolutely no negative impact on employment or economic growth.

Perhaps we wouldn’t be having this discussion if CFIB encourages their members to work with their employees to develop workplace pension plans.

How can CFIB be so critical of expanding our public pension system when very few of their members contribute to pension plans for their workers.

What is the CFIB solution to the retirement security crisis we face? Let all workers live in poverty during their retirement years.

If CFIB is going to involve itself in this important policy debate, it should at least do so with honesty and integrity.

Thursday, May 02 at 3:40 pm | Reply

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