The Canada Pension Plan (CPP) has long been a cherished pension savings vehicle for Canadians. Established in 1965, it complimented the Old Age Security (OAS) benefit.
The CPP doesn’t come free; we and our employers all pay for it through payroll deductions. However, these deductions are pre-tax and modest when we consider the benefit they provide later in life.
So what are we asking the Government to do?
What we are asking for is simple and achievable.
We are asking the Federal government to increase contributions to the CPP by 3% over a period of seven years for both employees and employers.
And, to increase immediately the Guaranteed Income Supplement (GIS) by 15% to lift all seniors out of poverty. This would be funded by reducing Registered Retirement Savings Plan (RRSP) tax subsidies.
As an aside, it is worth noting that Canadian’s are gouged by RRSP investment fees, and there is no guarantee of the pay-out when Canadian’s retire – not a great savings vehicle at all.
Why are we asking for increases to the CPP and GIS?
Now more than ever, in an era of vanishing employer pensions plans, reduced to non-existent post retirement benefits, less and less affordable housing, rising living costs, and regressive austerity measures, seniors are forced to make very tough decisions. Some have to decide between buying their medications or buying groceries or paying rent.
Poverty has a staggering impact on all aspects of life: mentally, emotionally, and physically, collectively and individually. Those in poverty tend to have poorer health outcomes leading to increased usage of the health care system. They become trapped in a dynamic that supports and grows the cycle of poverty for them and their family members. Poverty decreases participation in fundamentally important social functions such as community engagement, wellbeing, and democracy in general.
From an economic standpoint, an increased CPP and GIS would be greatly beneficial to the economy. Studies have shown that the last major CPP increase resulted in an economic boom. It not only benefited retired Canadians, but it helped grow, support, and sustain the economy.
In an age where employer funded pensions plans are being diminished or removed altogether by employers, where RRSP’s are not being utilised by most Canadians, and where neither offer the returns or the stability necessary for most Canadians, it is absolutely vital to have a universal plan that can be accessed by all Canadians.
The CPP is a very large and well invested pension fund that delivers stable returns. In this case, bigger is absolutely better. Its good growth is assured when the economy is doing well and it is able to easily whether down turns when the economy is not doing well.
The CPP is portable, so no matter where you are in Canada, it goes with you.
Look around; we are regarded as an aging country. If we continue on this current path, things will certainly get worse for our seniors. They are our neighbours, our fellow citizens; after a lifetime of hard work, they deserve to enjoy their later years with dignity and with our thanks.
What can you do?
- Call your Member of Parliament Tell them you support the CLC’s position on phasing in the doubling of the CPP. Ask them to support it.
- Call your Provincial Representative and ask them to support the CLC’s proposed change to the CPP.
- Assist with the campaign, Sign up online (for more information click on the CLC link below).
- Join the Facebook page “Retirement Security for Everyone”.
- TALK TO CO-WORKERS in your workplace and ask them to call their MPs and provincial government representatives. Ensure this campaign is discussed at your union meeting.
- Write a letter to your local newspaper.
For more information on the Canadian Labour Congress (CLC) and Canadian Medical Association (CMA) supported campaign, “Retirement Security for Everyone, Get the Job Done”, please click on the link below.