Cutting taxes, not increasing them, key to improving retirement savings
TORONTO, June 15 /CNW/ - The Canadian Federation of Independent Business (CFIB) is disappointed that a majority of provinces have joined the Federal government in examining ways to increase Canada Pension Plan (CPP) payroll taxes.
"Unfortunately, rather than considering ways of helping small businesses and employees ensure they have the resources to save for their own retirement, governments appear to be falling for the union proposal that the only way forward is to hike mandatory CPP premiums," said Catherine Swift, CFIB president. "Unions are pushing for CPP changes in order to divert attention away from gold-plated unionized public sector pensions - which are subsidized by the private sector - an issue which appears to have been lost in this discussion."
In a May, 2010 CFIB survey, a full 71 per cent of small firms opposed the idea of increasing mandatory CPP premiums. This was based on a sample of nearly 8,000 business owners from across Canada. "It seems to have been forgotten that businesses and employees endured a massive increase in CPP premiums over the 1990s just to ensure the program was back to a secure footing after years of government mismanagement. CPP premiums for both employers and employees have already risen by 75 per cent since the late 1990s with no commensurate increase in benefits. Canadians should be skeptical of union claims that they can enjoy a dramatic increase in CPP benefits for a few cents per hour," Swift added. "As always, if it sounds too good to be true, it is."
Canadians should also be made aware that because of the requirement for the CPP to be fully funded, premium increases now will only result in benefit increases many years from now. CPP benefit increases are likely decades away.
CFIB will be using the summer months to meet with premiers and finance ministers from across Canada to remind them of the damaging effects of increasing payroll taxes on Canadian businesses and the economy. "We hope that ministers will recognize the significant impact a multi-year payroll tax hike will have and reconsider their initial support," Swift added.
To view the full list of recommendations and to read the submission, visit: www.cfib.ca
SOURCE Canadian Federation of Independent Business
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