MONTREAL, Dec. 12, 2013 /CNW Telbec/ - With the annual meeting of the Finance Ministers of Canada, the
provinces and territories about to take place at Meech Lake in a few
days, the Quebec Employers Council took advantage of the occasion to
send the following letter to decision-makers participating in this
On the eve of the annual meetings of the finance ministers of Canada,
the provinces and territories, the Quebec Employers Council wishes to
convey the deep concerns expressed by many Quebec and Canadian
employers about the issues which could potentially lead to major
impacts on the competitiveness of companies and on the overall growth
of the Canadian economy.
Indeed, over the last few months, some of the provinces and union
organizations in the country have come out in favour of various
proposals to enhance public pension plans, namely the Canada Pension
Plan (CPP) and the Quebec Pension Plan (QPP).
While being sensitive and favourable to the objective of encouraging
saving for retirement and promoting more financial security in
retirement, particularly considering the aging demographic, the
Employers Council still has serious reservations about the relevance
and benefits of such a measure. At the same time, the Council
reiterates it is strongly opposed to any increase of the tax burden for
Quebec and Canadian employers in terms of payroll taxes, and to any
hike in contributions to public pension plans that are not offset by a
revision of the benefits paid out by these programs or an equivalent
reduction of contributions in other programs.
It is worth noting that, internationally, Canada ranks well in terms of
retirement savings, although there will surely be major challenges that
must be met in the coming years, with increasing the level of savings
among Canadians being among these challenges. But, as many recent
studies and analyses have confirmed, the problem of maintaining one's
standard of living in retirement isn't generalized.
A detailed analysis by the McKinsey firm shows the majority of Canadian
households are well prepared and are likely to maintain their standard
of living in their retirement years. But close to 23% of Canadians
won't be able to generate an adequate retirement income to maintain
their standard of living once they are no longer a part of the active
There is a wide variance in the percentage of households that won't be
able to maintain their standard of living - it ranges from 4% for
older, low-income households, to 41% for older, high-income households.
It should be noted this estimate doesn't consider certain types of
savings, such as those derived from real-estate assets.
In this sense, the Employers Council believes the proposal to enhance
the CPP/QPP doesn't necessarily respond to a real need and, contrarily,
it risks having a negative impact on the economy, investments,
employment and wages, especially if certain jurisdictions go their own
way and offer a more generous pension plan than elsewhere in the
Moreover, while the federal, provincial and territorial governments have
made efforts to tighten control over spending increases, and are forced
to deal with increasingly limited resources in terms of public
finances, a hike in their contributions to the CPP/QPP, as employers,
will only further reduce their room to manoeuvre in the budget.
Such an enhancement would not encourage the extending of an active life,
which is the objective we should be accentuating in the current aging
demographic context; it would instead encourage people to take early
Beyond a simple debate on enhancing public pension plans, we believe it
is imperative that the federal, provincial and territorial governments
act quickly and concertedly in addressing the issue of funding the
various programs paid by payroll contributions and further harmonize
the offer in this regard between the various jurisdictions. These
payroll taxes are, in effect, to be factored into the overall taxation
which employers have to incur, and a steady increase in this ever
growing tax burden can hamper investments and job creation. As an
example, in 2013, for an employee with an annual income of $40,000,
these taxes represented an average cost of $4,013 for Canadian
employers - a 10% hike in the nominal salary paid out.
In the hope these few comments will help provide you and your provincial
and territorial counterparts with some food for thought in this
important matter, please accept, honourable ministers, my most cordial
Quebec Employers Council"
The Quebec Employers Council brings together many of Québec's largest
companies and the vast majority of sector-based employers' groups,
making it Québec's sole employer federation.
SOURCE: Conseil du patronat du Québec
For further information:
Senior Consultant - Communications
Cell. : 438 886 9804