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Unifor welcomes British Columbia’s support for the proposed enhancement of the Canada Pension Plan (CPP). With BC’s approval all nine participating provinces have now agreed to strengthen the CPP.
“CPP enhancements will help ensure that generations of Canadians to come can retire with dignity,” said Unifor National President Jerry Dias. “The path is now clear for new federal legislation and Unifor looks forward to the speedy implementation of these CPP reforms.”
Unifor members and retired workers have been part of an active campaign to improve the CPP, which has resulted in the first benefit increase in the plan’s 50 year history. This is a significant victory for the labour movement. The CPP enhancement will provide a necessary improvement to the retirement income system as employers continue to abandon their commitment to workplace pension plans.
The proposal to expand the CPP, to be phased in over seven years starting in 2019, was first announced at the Finance Minister’s meeting in June. Benefits will be raised to replace 33 per cent of pre-retirement earnings up to a new maximum amount of $82,700. The current CPP replaces 25 per cent of pre-retirement earnings up to a maximum of $54,900.
More than 60 per cent of employed Canadians have no workplace pension plan; a stronger, universal, portable CPP with higher benefits will help these workers avoid a decline in their standard of living in retirement.
Predictably, critics say that now is not the time to fix the out-of-date CPP, with claims that improvements may lead to a wage or benefit freeze or even the elimination of jobs.
“The critics are using the exact same arguments, from the same organizations, made almost 20 years ago when the last contribution increase was initiated,” said Dias. “At that time GDP grew, investment increased and employment rose. These fears were ungrounded then and they are ungrounded now.”
