As Minister of State (Finance) I have been working with Finance Minister Joe Oliver on the announcement that our Conservative Government intends to consult Canadians on options for allowing voluntary contributions to the Canada Pension Plan (CPP). Allowing Canadians the choice to contribute more to their CPP on a voluntary basis would increase their retirement savings and provide another ‘tool in the toolbox’ for Canadians who are trying to plan for the future.
Currently, Canadians can use Registered Retirement Savings Plan (RRSPs) and their Tax-Free Savings Account (TFSA) to set aside funds for their retirement years. We are all encouraged to try to ensure we receive in our retirement years at least 50% of the income we earned while we were working.
As the Government, we have already provided the option of Pooled Retirement Savings Plans (PRSPs) making it possible for workers without an employer-provided pension plan to join (or create) a pension plan with other workers who do not have access to a pension plan. This measure serves the needs of many small businesses that are prepared to ‘pool’ their savings and thereby increase their retirement-savings income.
While our Government is putting forward voluntary measures, the Liberals and the NDP would impose a job-killing payroll tax, reach into the pockets of hardworking Canadians to reduce their take-home pay, and take away Tax Free Savings Accounts from Canadians. They want to force a mandatory increase of CPP premiums paid by workers and employers. The Liberal leader announced his plan to increase contributions that would amount to $1,000 for every worker earning $60,000 a year. Ontario has already created its own provincial pension plan that Ontario workers and employers are now forced to support, reducing pay checks and limiting employers’ ability to create more jobs.
Our Government believes in providing choices, voluntary options, such as the Pooled Registered Pension Plan and the Tax-Free Savings Account. We will continue to build on these successes with new choices to save for the future, not mandatory payroll tax hikes which would take money out of the pockets of hard-working Canadians.
We are also constantly looking at new ways to create a stronger retirement for Canadians. That is why in Budget 2015 we are reducing the minimum withdrawal factors for Registered Retirement Income Funds to allow seniors to preserve more of their retirement savings so they can better support their retirement income needs. As well, we are increasing the Tax-Free Savings Account annual contribution limit from $5,500 to $10,000, in order to provide Canadians at all income levels with greater opportunity to save on a tax-free basis. We will continue to explore new options that will allow Canadians to save for their retirement on a voluntary basis.
If you have any questions or concerns regarding this or previous columns you may write me at 4945-50th Street, Camrose, Alberta, T4V 1P9, call 780-608-4600, toll-free 1-800-665-4358, fax 780-608-4603 or e-mail HYPERLINK “mailto:Kevin.Sorenson.C1@parl.gc.ca” Kevin.Sorenson.C1@parl.gc.ca.