Canada / Expanding Canada Pension Plan benefits and the debate over the premiums

Finance Minister Jim Flaherty thinks that expanding Canada Pension Plan benefits might be a good idea, but just not now. The Canadian Federation of Independent Business thinks it might never be a good idea and has launched a national campaign against the reform.

Both have asserted that the requisite hikes in CPP premiums would act like any payroll tax by retarding economic recovery and killing jobs. The CFIB estimates that 700,000 “person years of employment” would be lost over the reform’s first 20 years.

In contrast, most knowledgeable pension experts have reached the conclusion that expanding CPP benefits would be an important advance in social policy. So should worries about the impact of higher CPP premiums be allowed to stand in the way of better income security for future generations of retirees?

These concerns are based on misconceptions about the nature and impact of CPP premiums. Fortunately, these misconceptions are easily addressed, as CPP premiums are unlike any other payroll tax.

Chosen excerpts by Job Market Monitor. Read the whole story at 

via Ignore the ‘job-killing’ mantra. It’s time to expand CPP benefits – The Globe and Mail.