Manda­tory CPP tax hike un­pop­u­lar, CFIB poll shows

Southwest Booster - - OPINION - LAURA JONES, CFIB

A manda­tory in­crease to the Canada Pen­sion Plan pay­roll tax was on the agenda for Canada’s fi­nance min­is­ters again as they meet re­cently.

The con­sen­sus view emerg­ing from pre­vi­ous meet­ings — that an in­crease to CPP is de­sir­able and not a ques­tion of “if ” but just when and how — is out of touch with the con­sen­sus view of Cana­di­ans ac­cord­ing to pub­lic opin­ion re­sults re­cently re­leased.

The most in­ter­est­ing re­sult from the poll is that Cana­di­ans rank a manda­tory CPP in­crease close to the bot­tom of the list of pos­si­ble ways that gov­ern­ment can help Cana­di­ans save for re­tire­ment.

Other op­tions such a al­low­ing a vol­un­tary in­crease in CPP, pro­vid­ing an in­cen­tive such as a one­time match for a re­tire­ment sav­ings con­tri­bu­tion, and hav­ing gov­ern­ment con­trol its own spend­ing to al­low for tax relief come out far higher.

Con­trol­ling gov­ern­ment spend­ing to pro­vide more tax relief is the top pref­er­ence for both the gen­eral pub­lic and small busi­ness. I guess peo­ple think it’s a bit rich that fi­nance min­is­ters are ig­nor­ing over­spend­ing prob­lems while sug­gest­ing that Cana­di­ans be man­dated to save more. One ex­am­ple of how much gov­ern­ment over­spend­ing costs: if all pub­lic sec­tor em­ploy­ees were paid at pri­vate sec­tor norms, ev­ery fam­ily would have an ad­di­tional $3,100 a year to put to­ward re­tire­ment.

The poll shows that a manda­tory in­crease in CPP premi­ums is a bad idea as it would have some very neg­a­tive un­in­tended conse- quences. Small busi­nesses would look at freez­ing or cut­ting wages (76 per cent) and re­duc­ing in­vest­ments in their busi­nesses (59 per cent) to pay the in­crease.

Many of the gen­eral pub­lic say they would be forced to cut back on ba­sic ne­ces­si­ties such as food and rent (45 per cent) and shift sav­ings from other re­tire­ment ve­hi­cles (42 per cent).

Over the past month I have had the op­por­tu­nity to meet with sev­eral fi­nance min­is­ters.

I have been struck by the strong sense they have that there has been enough dis­cus­sion about whether in­creas­ing manda­tory CPP premi­ums (and ul­ti­mately some time down the road ben­e­fits) is a good idea. While there has been a lot of talk among fi­nance min­is­ters, there has been no mean­ing­ful con­sul­ta­tion with those who would be af­fected.

We haven’t even heard as much through the me­dia as we nor­mally would on such a rad­i­cal pol­icy change. We can thank Rob Ford and Mike Duffy for that.


con­sulta- tion would in­clude dis­cussing the ques­tion of “if ” a manda­tory in­crease in CPP premi­ums is a good idea at all and ex­plore other op­tions. In­stead, we are hear­ing that fi­nance min­is­ters would be hap­pier to just dis­cuss the when and how.

The “if ” ques­tion they have set­tled among them­selves. This is a recipe for some very bad pol­icy and, by the looks of the polling, some bad pol­i­tics too.

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