Only one in four Canadians is confident they will be able to save enough to live comfortably in retirement. 11 million Canadians have no workplace pension, and few say they can afford to contribute to a private pension plan.
A gradual increase to Canada Pension Plan contributions in order to increase benefits is the best, most cost effective way to improve retirement income security for all Canadians.
By slowly increasing CPP contribution rates by 2.85 percent over 7 years, Canadians will – over time - receive 50 percent of their pre-retirement income in CPP benefits, rather than the current insufficient 25 percent.
For a worker earning $47,500 or more per year, the initial cost of gradually doubling future CPP works out to about 9 cents per hour.
All of the increased contributions go back into the CPP. They do not provide the federal government with any revenue, and are not a pay-roll tax.
If we ignore retirement income insecurity, more and more of Canada’s aging population will be forced to work longer, and face a retirement living in poverty.