In a recent opinion piece in the Globe and Mail, the Canadian Federation of Independent Business (CFIB) CEO Dan Kelly reiterated his longstanding position against CPP expansion and ignores the growing retirement insecurity facing the over 11 million Canadians who do not have a workplace pension plan, and little prospect of their employer sponsoring one.
He touts the so called Pooled Registered Pension Plan (PRPP) federal option, which isn’t a pension plan at all. It is a form of group RSP, one that employers do not have to contribute to and one that employees can opt out of. On just these points it fails any measure in terms of a meaningful response to Canada’s retirement security challenges.
When compared to rates in other OECD countries, CPP contribution rates are extremely modest. Furthermore, prior to the last increase of CPP contributions in the late 1990s, groups like the CFIB raised fears that increase in rates would destroy the economy but instead, the unemployment rate subsequently declined significantly.
Our economy could withstand a modest CPP premium increase to improve CPP, but it cannot handle more and more seniors living in or near poverty.