Expansion of CPP won’t benefit Canadians: Fraser Institute
Posted Jun 16, 2016 7:03 am.
This article is more than 5 years old.
As finance ministers prepare to meet in Vancouver next week to discuss expanding the Canada Pension Plan, an economic think tank says it’s not necessary.
The Fraser Institute is out with a report claiming the five main reasons given for increasing CPP contributions are essentially myths.
Fiscal Studies Director Charles Lammam says the first myth is a key one: where the government claims Canadians just aren’t saving enough for retirement.
“They have money saved in stocks, bonds, personal investments, and even real estate that they can tap into when they retire. When you account for all these resources, it is abundantly clear that most Canadians are in fact well prepared for retirement,” he said.
Lammam says higher CPP contributions won’t increase retirement savings, as Canadians will just contribute less to other retirement plans.
The Institute also argues the CPP is not a low-cost pension plan as the government claims, and it doesn’t produce excellent returns for investors.
The research also says expanding the plan will not help cash-strapped seniors as promised because many didn’t contribute in the first place, and those that did may lose out on other government assistance programs if their CPP payments increase.
