TORONTO – The Canadian Federation of Independent Business is urging finance ministers to reject mandatory increases to the Canada Pension Plan, saying it will hurt the economy.
The organization says small businesses will have to hike payroll taxes, which will affect job creation.
They say Ontario and Prince Edward Island’s latest ideas are just “variations on a misguided themes.”
Ontario Finance Minister Charles Sousa will push for improvements to the CPP when provincial and territorial finance ministers meet in Toronto today.
Premier Kathleen Wynne says she wants to work with the federal government and other provinces to enhance the CPP, but will find what she calls a made-in-Ontario solution if she has to.
Prince Edward Island wants to hike maximum CPP contributions to $4,681.20 a year from $2,356.20 starting in 2016, and boost the maximum benefit to $23,400 from $12,150.
CFIB says their analysis suggests the P.E.I. proposal would result in a one per cent drop in wages and the loss of 500,000 person years of employment.
“Even polling done by public sector unions tells us that a majority of Canadians who are struggling to save for their retirement simply can’t afford to,” CFIB president Dan Kelly said in a release.
“Adding a higher payroll tax deduction to their paycheque is not going to help them.”
Ontario said it wants to make sure they take into account the potential impact on employers of any changes to the CPP program. Workers and companies currently split the premiums, which are 9.9 per cent of a workers’ annual salary.
The Canadian Labour Congress has been calling for a doubling of CPP benefits for several years.
Wynne says improving the CPP is her first choice, but says she will consider the implications of having an Ontario Pension Plan if there’s no consensus on the issue.
CFIB said four out of five respondents in a recent survey of their Ontario members rejected the idea of a separate provincial plan.
“Furthermore, 65 per cent said such a move would force them to freeze or cut salaries, and 42 per cent said they would have to reduce staff,” CFIB said.
The finance ministers will also discuss Old Age Security, federal transfers and the newly created co-operative securities regulator, an alternative to the stalled national regulator that only is supported only by Ontario, British Columbia and Ottawa.