TORONTO, Dec. 16 /CNW/ - With the release of a new proposal on pension
innovation in advance of the meeting of Finance Ministers in
Kananaskis, Alberta, the Canadian Federation of Independent Business
(CFIB) is pleased to see ministers moving away from focusing on raising
Canada Pension Plan (CPP) benefits and premiums.
"Small businesses will be pleased to learn that finance ministers are
concentrating on practical steps to improve retirement income vehicles
for employees and employers, rather than approving an increase in
mandatory CPP premiums," said CFIB president Catherine Swift. "The
framework for Pooled Retirement Pension Plans (PRPPs) has significant
potential to improve the mix of retirement savings options for smaller
firms and self-employed entrepreneurs."
As increasing the CPP requires the support of two-thirds of the
provinces representing two-thirds of the population, it does not appear
that there is enough support to move forward with the discussion of a
"modest" CPP hike that started in Prince Edward Island. "We are pleased
that ministers are recognizing the negative impact that an additional
payroll tax increase would have on the economy, employment and wages,"
noted Swift. CFIB's recent study on the proposal of the Canadian Labour
Congress (CLC) to increase CPP found that it would eliminate 1.2
million person years of employment.
CFIB supports the general direction of the proposal for PRPPs but is
opposed to any consideration that provinces may make participation by
employers mandatory. "Increasing the number and flexibility of
retirement savings options for employers is important, but the chief
roadblock for small businesses to offer such plans is affordability,"
Swift added. "Considering tax incentives and removing tax
disincentives for retirement savings tools is equally important to help
SMEs expand coverage for employees," she noted. CFIB has further
recommended that governments remove payroll taxes on employer
contributions to Registered Retirement Savings Plans (RRSPs) and work
to ensure that public sector pensions are made more affordable for
The Federation is also challenging Canada's financial institutions to
examine ways of putting such plans in place as soon as the rules allow.
"As finance ministers are looking to enable a new vehicle to
facilitate pension arrangements, the ball is now in financial
institutions' court to demonstrate that they can fulfill the goal of
helping small firms, their employees and the self-employed to save for
their retirement in a cost-effective way, with low management fees and
administratively simple processes," Swift concluded.
As Canada's largest association of small- and medium-sized businesses,
CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 107,000
members in every sector nationwide, giving independent business a
strong and influential voice at all levels of government and helping to
grow the economy.
SOURCE Canadian Federation of Independent Business
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