KENORA – Bob Nault, Member of Parliament for the Kenora riding is pleased that the government is moving forward to strengthen the Canada Pension Plan (CPP).
The announcement was made earlier this week by Prime Minister Justin Trudeau, after confirmation from British Columbia that they would come on board with the other provinces to enhance the CPP.
“I am very happy to see this move forward so that more Canadians will be able to retire with financial security,” said Nault. “As these enhancements are phased in to the CPP, it will help more people retire with peace of mind across the country including of course, those living in Northwestern Ontario.”
Following the confirmation today, the Government of Canada is advancing legislation to enact the CPP enhancement, which will be introduced in Parliament shortly. The changes to the CPP will be phased in gradually over seven years, from 2019 to 2025.
- The CPP is a portable, low-cost and modest pension that pools risk among contributors and pays a predictable and lifetime benefit to Canadians when they retire. Once fully in place, an enhanced CPP will put up to 50% more into the pockets of future retirees.
- It applies to all Canadians, except workers in Quebec, who contribute to the Quebec Pension Plan, which provides similar benefits to the current CPP.
- The new CPP will increase the share of eligible annual earnings received during retirement from one-quarter to one-third. It will also increase by 14 per cent the maximum income range covered by the CPP.
- To ensure that Canadians and the businesses they work for can adjust to these changes, the CPP enhancement will be introduced through a 7-year gradual phase-in starting on January 1, 2019.
- To offset the impact of increased contributions on eligible low-income workers, the Government of Canada will enhance the Working Income Tax Benefit.
- In addition, employee contributions to the enhanced portion of the CPP will be tax deductible in order to avoid increasing the after-tax cost of saving for Canadians.