Today, the B.C. government signed on to a mandatory expansion of the Canada Pension Plan.
This means all nine participating provinces have agreed to move forward with CPP changes. The Government of Canada is advancing legislation to enact the CPP enhancement, which will be introduced in Parliament shortly.
Read:
Small business response
On the back of this news, the Canadian Federation of Independent Business has said it’s disappointed. It notes in follow-up comments that CPP enhancement will result in added costs for small businesses and their workers.
CFIB says that most Canadians don’t know how the CPP works or what proposed expansion would mean. For example, when presented with the details about the size of the proposed CPP tax increase, 69% of business owners said they may need to freeze salaries and benefits to accommodate the hike, and more than a third said they may have to eliminate jobs, explains CFIB.
Also, according to an Ipsos poll of more than 2,000 employed or retired Canadians conducted in late August, 39% of Canadians falsely believe the government pays for part of their CPP, and only 26% know it will take approximately 40 years to fully phase in the expanded benefits, says CFIB.
Read: Ontario businesses expect less growth in 2017
“Weappreciate that Canadians support the concept of additional CPP benefits, [but] no one has informed them that there is likely to be a secondary effect on their wages,” says CFIB president Dan Kelly. The Ipsos poll reveals Canadian workers overwhelmingly oppose CPP expansion if it results in a cut – or even a freeze – in their wages.
CFIB is concerned that increasing CPP will make it even more difficult for SMEs to continue to grow Canada’s economy. So, the organiation is calling on the federal government to reinstate its promise to cut the small business corporate tax rate to 9%. And, CFIB is asking the federal and provincial governments for further actions, including a freeze in the minimum wage and lower payroll taxes like Employment Insurance and workers’ compensation premiums.
Read: