TORONTO—The final decision on Canada Pension Plan reform, set to take place July 15, is guaranteed to disappoint either the majority of small business owners, or the majority of everyday Canadians.
While three of every four small business owners are against CPP expansion, according to a recent poll carried out by the Canadian Federation of Independent Business (CFIB), 75 per cent of Canadians support some sort of reform, an Angus Reid Institute opinion poll found last month.
Another recent poll conducted by Forum Research found 68 per cent of Canadians are in favour of reform.
With decision time approaching at the end of next week—following a preliminary agreement between Ottawa and each Canadian province except Manitoba and Quebec June 20—the CFIB is urging Canadian premiers to tap the brakes.
“The agreement in principle was made behind closed doors, and far away from Canada’s economic reality,” Dan Kelly, the organization’s president, said. “We’re calling on governments to bring the deal to Canadians and to give them time to decide if this is the best deal for them. If it’s as good a deal as some governments are claiming, then they should have nothing to be afraid of by discussing its economic impact with the public.”
A vocal opponent of the CPP expansion agreement, the CFIB is calling on governments to delay the July 15 timeline to consult with Canadians and conduct a full economic impact analysis.
“Small business owners, like most Canadians, believe in evidence-based decision making. All they are asking for is that the evidence actually be collected before any decision is made,” Kelly said. “It is also critical that time be permitted to review important amendments being proposed by Manitoba and Quebec, which did not sign off on the deal.”
Staged in over several years beginning in 2019, the preliminary agreement will increase CPP premiums for workers and employers. An average Canadian worker earning $55,000 a year will pay an additional $7 a month in 2019, a figure which would increase to $34 a month by 2023. The plan’s maximum annual benefits will also increase by about one-third to $17,478 when fully-implemented.
Small businesses claim expanding the pension plan is not the best way for the federal and provincial governments help Canadians save for retirement, and that increasing contributions from employers will put pressure on wages and other corporate spending. 37 per cent of businesses said changes to the plan would force them to cut salaries.
Canadians support the plan regardless. 54 per cent acknowledge that businesses could be negatively affected by CPP reform, but are still eager to support it.
The top concern for the Canadians who favour the CPP agreement is ensuring retirees who have not saved adequately can quit work without living in poverty.
—With a file from The Canadian Press