Voluntary contributions to Canada Pension Plan considered
Our government believes in offering Canadians greater choice in managing their household budgets and retirement savings. In 2009, we implemented Tax Free Savings Accounts and in our budget increased the annual contribution limit from $5,500 to $10,000, to give Canadians more scope for tax free income. We introduced the Universal Child Care Benefit and recently enhanced it, along with increasing the Child Care Expense Deduction. We reduced the mandatory withdrawals on Registered Retirement Income Funds to accommodate seniors planning their retirement funds.
We believe a life of hard work should be rewarded. We are continuously looking for ways to make seniors’ lives more affordable and reduce their tax burden so they can enjoy a secure and dignified retirement.
Most Canadians want the freedom to make their own financial choices when saving for retirement. That is why, a few weeks ago, I announced our Government’s intention to consult, during the summer, with experts and stakeholders on options for allowing voluntary contributions to the Canada Pension Plan (CPP). This would pemit Canadians to contribute more to their retirement.
On the other hand, we will not impose a new mandatory payroll tax on Canadians and job-creating businesses, a multi-billion dollar tax that would kill jobs, destabilize the economy and make life less affordable for all Canadians.
According to the Canadian Federation of Independent Business, 69 percent of employers polled said they would have to freeze or cut salaries if a mandatory Ontario Pension Plan were introduced. Additionally, 53 percent say they would have to lay off workers. In contrast, voluntary contributions are the responsible way forward for Canadians who want to opt in to this savings vehicle. Greater choice would be good for Canadians, good for business and good for the economy.
However, to protect pensions for current and future pensioners, we strongly believe the CPP should continue to operate independently of political intereference. Forcing pension funds to invest in specific pojects that reflect political preferences would undermine that independence and put pensions in jeopardy.
To those who would interfere with the CPP, I say keep your hands off our pensions!
Canada’s retirement system is among the best in the world. Our government’s intention is to maintain this exemplary record. By offering flexible savings tools we let seniors plan for a more secure retirement.
