MP opposes CPP expansion

In my July 6 MP report, I discussed the many proposed changes by the Liberal Government to increase Canada’s CPP system.

That report can be found at http://www.danalbas.com/mp-report/changes-in-cpp.    

This week's debate on expanded CPP, known as Bill C-26, is currently before the House of Commons where I voiced opposition. 

As I believe in being accountable to citizens ,I would like to share some of the reasons why I believe now is not the ideal time to expand CPP.

One concern I heard loudly from small business owners was the obvious fact that expanded CPP will increase the costs of not only hiring new workers, but also increases payroll costs for existing workers.

It is for this reason that expanded CPP is often referred to as a payroll tax.

While no small business owners told me they would eliminate existing staff due to increased costs, many said future wage increases might instead be directed into covering the CPP increases or that hiring additional workers may be put on hold.

Given that Canada’s job numbers are weak and economic growth forecasts are being downgraded, now is not the ideal time to increase employment costs to small business owners.

I also oppose expanded CPP because it is not an ideal retirement asset.

For those who do not live to 65 or only live a few years beyond 65, contributions paid to CPP are of no significant benefit to a spouse or family because the full value of the contributions cannot be transferred through an estate.

Conversely, a TFSA is fully transferable to your family though an estate and does not adversely impact small business job creators.

Ironically, the Liberal Government reduced TFSA contribution levels, arguing they were worried Canadians would be saving too much before turning around to announce plans to increase CPP over concerns citizens were not saving enough thus Government would do it for them. 

One of the lesser known criticisms of CPP, and one I raised in Ottawa this week, was the fact that your CPP contributions are being consumed by significantly rising administration costs.

As well-known national media columnist, Andrew Coyne, has also pointed out staffing has increased at the CPP Investment board from five in 1999 to around 1,200 today.

Likewise, operating costs went from $3 million in 2000 to $803 million in 2015 and external management fees have risen from $36 million in 2006 to $1.25 billion in 2015.

These are significant administration increases, especially in light of the fact that the Office of the Superintendent of Financial Institutions reports the CPP, although sustainable currently, has an unfunded liability of $9 billion.

Given that increased CPP adversely impacts small business job creators at a time when the economy is sluggish, this is a serious concern.

On top of that concern is the limited financial transportability of CPP.

As always I welcome your comments, questions and concerns on this or any topic. I can be reached at [email protected] or toll free at 1-800-665-8711.


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About the Author

Dan Albas, Conservative member of Parliament for the riding of Central Okanagan-Similkameen-Nicola, is the shadow minister of innovation, science, economic development and internal trade, and sits on the standing committee on finance.

Before entering public life, Dan was the owner of Kick City Martial Arts, responsible for training hundreds of men, women and youth to bring out their best.

In British Columbia, Dan has been consistently one of the lowest spending MPs on office and administration related costs despite operating two offices to better serve local constituents.

Dan is consistently recognized as one of Canada’s top 10 most active members of Parliament on Twitter (@danalbas) and continues to write a weekly column published in many local newspapers and on this website.

He can be reached at [email protected] or call toll free at 1-800-665-8711.

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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