Susan Eng, CARP’s director of advocacy, believes both measures can be implemented. “With just one or the other, you can’t do enough.”
Vettese notes the earnings base for America’s Social Security is US$106,800, one reason American benefits are more generous than ours. But to be fair to all generations, he would implement a higher YMPE gradually, with no retroactivity, so extra CPP benefits kick in slowly over 40 years. So as Hamilton notes, improved CPP benefits will be “of little use to those now nearing retirement.”
Even this simple fix entails “considerable” implementation challenges, Ambachtsheer says. Also, he warns, many may be disappointed when they realize that whatever is done, “it will only have major impact decades from now.”
Among the skeptics is consultant Greg Hurst, who identifies six “myths” propagated by Big CPP proponents. One is that CPP operates as a standalone program. Many employer pensions are integrated with CPP so any expansion of contributions and benefits will impact the rest of the system. Another myth is that CPP is inexpensive to administer.
Perhaps most serious is the notion that CPP is self-funded and imposes no tax burden. Public-sector employers pushing for a big CPP are funded by taxpayers, Hurst says, as are CPP contributions made by those employers. Ottawa treats CPP contributions as tax deductible so they constitute a “tax expenditure,” like employer pension contributions and RRSP contributions.
Keywords: CPP
