Wynnes takes credit for CPP deal

OTTAWA-In two and a half years, Canadians will gradually start paying more premiums into the Canada Pension Plan.

It was Ontario’s constant demand to ensure people have an adequate retirement income and its decision to pass legislation creating a provincial pension plan that prevented the issue from languishing on the back burner, Wynne said.

The agreement-in-principle, which only Quebec and Manitoba neglected to endorse, will see an increase in monthly premiums phased in starting at $7 a month in 2019 for a typical worker earning about $55,000.

The increased contributions are to be phased in starting in 2019, coming into full effect in 2025 to give business time to adapt.

The majority of provinces and the federal government reached agreement on a deal in Vancouver that would see pension premiums rise, in stages, by an additional $34 per month by 2023.

“UFCW Canada and our labour allies have campaigned for many years for the CPP to be doubled”.

The CPP premium on income between $54,900 and the new maximum, $82,700, will be lower – it is expected to be 4 per cent rather than 5.95 – a spokesperson for Finance Minister Bill Morneau said in an e-mail to CBC News.

Once the plan is fully implemented, the maximum annual benefits will increase by about one-third to $17,478.

The existing CPP requires contributions of up to C$2,544 per year, per person, from both an employee and an employer. “So it didn’t all of a sudden come together at this meeting”, Mendes said.

The new pension plan can proceed even without Manitoba’s approval because it only requires support from seven provinces with two-thirds of the country’s population. Ontario’s increase was set to begin in 2018.

The province made those compromises in order to secure the CPP deal, Wynne said.

“Ontario has always favored a national solution to strengthening retirement security”, Ontario Minister of Finance Charles Sousa and Associate Minister of Finance Indira Naidoo-Harris, said in a statement. Quebec can adjust the QPP as it likes, but it has typically followed the CPP.

Even so, DePratto said the proposal represents a “significant, guaranteed enhancement to most Canadians’ retirement incomes”.

“As we know, payroll taxes tend to be the most economically inefficient taxes”.

According to the CFIB, 78 per cent of small business owners in Saskatchewan oppose a mandatory CPP premium hike, with another 62 per cent stating it would put pressure on freezing or cutting salaries and 27 per cent saying it would force them to lay off employees.

Others were thrilled by the announcement.

Ontario Premier Kathleen Wynne confirmed Tuesday that her government would scrap plans for its own pension scheme.

“All of those benefits really do contribute to the success of this moment”, she said.