Typical family losing out on $3,110 per year, further undermining Manitoba’s push for CPP premium hike ahead of tomorrow’s Premiers’ meeting
Winnipeg, November 14, 2013 – If government workers were compensated at private sector norms, Canadian families would have an extra $3,110 per year to put towards their own retirement, according to analysis released today by the Canadian Federation of Independent Business (CFIB).
These findings come in advance of tomorrow’s meeting of Canada’s Premiers in Toronto, where hiking Canada Pension Plan and Quebec Pension Plan premiums is expected to be discussed. Taking into account wages and benefits, federal, provincial, and municipal government employees are compensated between 25 to 42 per cent above the private sector. If they were compensated at private sector norms, Canadians could save $27 billion annually or $3,110 per family (where both parents are working) or $1,555 per worker.
“It’s hard for Canadians to buy the argument for higher payroll taxes, when our governments have created a two-tiered pension system, where the majority subsidize the nest eggs of the minority,” said CFIB’s executive vice-president Laura Jones. “While small business owners agree on the need to help Canadians to save for their retirement, they reject the argument that the only solution is to hike payroll taxes on employers and their employees”.
“It’s disappointing the Manitoba Government re-iterated its support for CPP expansion in this week’s Throne Speech. The PST hike apparently wasn’t enough as this government continues to support another tax hike on Manitoba small business owners, and their employees, through a CPP hike,” said Marilyn Braun-Pollon, CFIB’s vice-president, Prairie & Agri-business. “CFIB is very concerned about the impact it could have on Manitoba’s economy. We continue to encourage the Selinger government to pass legislation as soon as possible to allow for Pooled Registered Pension Plans, which will provide a voluntary option for retirement savings for small business owners and their employees.”
There is growing evidence of the negative impact that an increase in mandatory CPP/QPP premiums would have on Canadians, including:
· Respondents to a recent CFIB member survey in Ontario rejected the idea of a separate mandatory Ontario Pension Plan. 65% said such a move would force them to freeze or cut salaries, and 42% said they would have to reduce staff; and
· CFIB analysis of the model being proposed by PEI Finance Minister Wes Sheridan for a mandatory CPP/QPP hike premium suggests it would result in loss of 500,000 person years of employment and a 1% drop in wages.
“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,” added Jones. “Hiking payroll taxes won’t help them, but give government a pass on addressing overly generous public sector wages and benefits”.
The post Public sector compensation robbing Canadians of retirement savings appeared first on Siemens Says.