Now is not the time to expand CPP

Finance ministers from across the country will meet in Vancouver this month to talk about expanding the Canada Pension Plan (CPP).

Our members firmly believe our minister of Finance should reject any expansion proposal.

Many Newfoundlanders and Labradorians are living paycheque-to-paycheque, struggling to make ends meet.

They were already finding it difficult to put money away for retirement and the last provincial budget has done nothing to help.

The last thing any Newfoundlander and Labradorian needs to hear is government is coming to take even more money out of their pockets and out of our economy.

According to Statistics Canada data, in 2015, the average Newfoundlander and Labradorian earned in the neighbourhood of $48,000 per year.

If the Minister of Finance agrees to CPP expansion, this could mean an additional $850 a year in added CPP payments.

Even more frustrating perhaps is that the system would require 40 years of paying these increased CPP premiums before anyone would see the full benefit. Seniors and those close to retirement would not realize any benefit from the increase in premiums, just more money coming off their paycheque in the short-term.

Business owners also cannot afford another increase in their operating costs after the recent budget.

The retail sales tax on insurance premiums alone will cost business owners thousands, if not tens of thousands, of dollars a year.

A business with 10 employees making an average $48,000 a year could pay upwards of an additional $8,500 a year in increased CPP premiums.

Those who are self-employed earning the average salary would shoulder the entire increase themselves paying an additional $1,700 a year.

As a result, small business owners have told us they would be forced into reducing hours, freezing wages or, in the worst case scenario, laying off hardworking, valued employees.

Canadian Federation of Independent Business analysis of Statistics Canada data suggests CPP expansion could result in about $400 million being transferred from Newfoundland and Labrador to Ottawa.

This represents about 1.3 per cent of provincial gross domestic product, driving the province further into recession.

Newfoundland and Labrador just can’t afford that kind of impact, especially in the current environment.

The government has to do what is best for our small businesses and residents alike.

The minister’s only sensible option is to put Newfoundlanders and Labradorians first and vote against any increase in CPP premiums.

Vaughn Hammond, director of provincial affair Canadian Federation of Independent Business — Newfoundland and Labrador