On Parliament Hill

During the election, the Liberals ran on a platform that focused on leaving more money in the pockets of Canadians. Instead, the Liberal Government plans to hike payroll taxes by increasing the Canada Pension Plan (CPP) premium rate. Unfortunately, this plan will do more to keep money out of the pockets of Canadians than in them.

The Liberal Government is moving to take money from the paycheques of hardworking Canadians, leaving less for our savings accounts and putting hundreds of jobs at risk in the process. Individuals and the businesses that hire them will feel the consequences of this decision firsthand.

For workers, higher mandatory CPP contributions will leave less money available for private savings. Workers will be paying thousands more every year making it more difficult for new grads to pay off their student loans or buy their first home, or for families to save for vacations or the kids’ post-secondary education. Small business won’t have the ability to raise workers’ wages while some may have to make the hard decision to freeze hiring due to the increased financial pressures an expanded CPP brings.

An analysis of the proposed new model by the C.D. Howe Institute concluded that Canadian workers will indeed see greater benefits from the CPP, but they’ll be offset by clawbacks to other benefits. The elimination of income splitting, the cancellation of a number of popular tax credits such as the Children’s Fitness Tax Credit, and the reduction in annual TFSA contributions will only serve to increase the tax burden on Canadians when considered alongside the decision to expand the CPP.

Rather than Prime Minister Trudeau dictating how Canadians must save for retirement, the Conservative Party believes that Canadians should be free to manage their own money. That’s why our previous Conservative Government helped Canadians save through tax-free savings accounts (TFSAs) and opportunities to make voluntary contributions to the CPP. Everyone agrees it’s important to save for retirement, but there is no reason to assume that the CPP is the best mechanism with which to do that. Other optional savings vehicles like RRSPs and TFSAs provide a practical way for Canadians to save while ensuring they have flexibility with their money in the future.