The Province of BC has launched an official engagement portal to allow the business community and citizens an opportunity to provide input and understand the impacts of the proposed Canada Pension Plan Initiative.
According to the Canada Pension Plan website, there are two key elements in the proposed changes:
“1.The income replacement rate will be increased from one-quarter to one-third of insured eligible earnings. This means that workers who retire after contributing to the enhanced system will see their monthly CPP benefits increased.
2.The upper insured earnings limit will be increased to $82,700 in two steps in 2024 and 2025, an increase of about 14% from its projected level in 2023. For workers earning above the current maximum, this means that more of their income will be covered by CPP and they will receive increased CPP benefits when they retire.”
Employer and employee CPP contribution rates would rise 1% respectively beginning in 2019 on a five-year contribution rate phase-in.
Here’s an example of how this might impact an employer from the Province of BC’s news release:
“Each employee earning an average salary of $54,900 will require an additional employer contribution of $7 to $8 per month for each of the first five years of the phase in. In years 2024 and 2025, there will be no additional contribution for employees at this level.
- For a small business with five employees, the total monthly increment will be about $37 per month in this case.
- For a small business with ten employees, the total monthly increment will be about $75 per month in this case.
- For a small business with 20 employees, the total monthly increment will be about $149 per month in this case.”
For more information, visit the engagement portal for a summary of key program elements.
The request for feedback on these proposed amendments to CPP has been brought to our attention by the Ministry of Small Business to ensure the views of the small business sector are well represented and considered, with any feedback submitted by the end of summer.
