Canada's CFOs and senior financial executives applaud modest CPP expansion
TORONTO, ON -- Financial Executives International Canada (FEI Canada), the country's leading association for senior financial executives, applauds the federal government's proposal to expand the Canada Pension Plan by raising premiums moderately over time.
"We are very pleased. We're happy this will start soon -- the sooner the better," said Tony Hooper, who serves as Co-Chair of the Pension Committee of FEI Canada's Policy Forum, along with Kevin Sorhaitz. Sorhaitz said: "This looks like really good news for mid-career and younger Canadians, especially those without access to a workplace DB pension plan." Hooper said Canada's CFOs support the proposed incremental increase of the current 4.95% contribution limit, by one percentage point, and the increase in the contribution limit to $82,700 by 2025. He said this was preferable to the Ontario government's proposed pension plan, which he said would have been a steep hit to small business in particular.
"We're glad they're getting on with it and they're doing a phased-in approach," Hooper said of the federal-provincial agreement, which will be phased during a seven-year period. "While the ORPP seems to have helped the CPP expansion debate, it was wise to back off the Ontario go-it-alone approach." The federal proposal would provide a lower payout than the ORPP, but will be portable, universal and tax-deductible.
In the past, FEI Canada has publicly called for a modest expansion of Canada's pension system, in its May, 2014 white paper entitled CPP Expansion: A critical part of the solution as well as other measures to help Canadians finance their retirement.
"It is still important for Canadians to plan for retirement, as failure to do so will eventually put additional burden upon taxpayers through increased taxes in the future," said Norm Ferguson, chair of FEI Canada's Policy Forum. "FEI Canada supports the significant steps taken to reach this milestone in support of labour mobility, adequate income for retired Canadians and the gradual approach to minimize impacts on Canadian businesses."
"FEI Canada has long encouraged the government to help Canadians plan for retirement by developing a national framework on adequate retirement income," said Michael Conway, FEI Canada's CEO and national president. "This agreement would help ensure long term solvency of pension funds while maintaining stable contribution rates and preserving a fair standard of living for Canadians in their senior years," he said.
Other white papers on pensions prepared by FEI Canada's Pension Committee include: