Worried they’ll outlive their savings, 3 in 4 Canadians want CPP expansion: poll
A large majority of Canadians would like to see an expansion of the Canada Pension Plan, according to a new poll by the Angus Reid Institute.
The poll found that three-quarters of Canadians think CPP should be expanded, even though it means higher deductions on every paycheque.
“A good number of Canadians are worried about outliving their money, not having enough to get them through their golden years,” said Shachi Kurl, executive director of the Angus Reid Institute.
“But frankly when you see 70 per cent of Canadians agreeing about anything, that is significant. And that means it cuts across regional lines, gender lines, a lot of the demographic areas that tend to separate Canadians in terms of their public opinion.”
Provincial and federal finance ministers will probably want to keep that in mind as they discuss the future of CPP in Vancouver on Monday.
Enhancing the CPP, which was a Liberal campaign promise, is supported by some provinces, but not all. Saskatchewan in particular has voiced its opposition to any expansion of the pension plan.
Making changes requires broad agreement: seven in 10 provinces must agree, and those seven provinces must represent at least half of Canada’s population. This gives the most populous province, Ontario, the most say in the discussions.
Why expand the plan
Some studies, including one earlier this year released by the left-leaning Broadbent Institute, suggest that many Canadians haven’t saved enough for retirement, and many don’t have workplace pension plans (some other studies suggest that Canadians have enough savings). People who haven’t saved enough might rely on government-administered programs like the CPP to get through their old age.
But, the CPP’s current maximum payout of $1,092.50 a month probably won’t go very far for many people.
Source: Employment and Social Development Canada
If you want to increase the amount of monthly payout that people receive, you could increase the upper limit of money that they pay CPP premiums on — from the current maximum of $53,600, or make people pay a higher rate of their earnings.
Raising the earnings cap would help to target that group of people who are earning between $50,000 and $80,000 who don’t have company pension plans, said Tammy Schirle, associate professor of economics at Wilfrid Laurier University.
“By raising that earnings cap you’re going to have more of your earnings covered, and have a higher potential benefit from the Canada Pension Plan at the end.”
These kinds of changes, however, mean that people will pay more during their working years — and so will their employers. This has some people wondering if now is the right time to make changes to the pension plan.
“Over half of Canadians do express some worry that expanding CPP does increase the level of burden on employers, so that doesn’t go without notice or without concern among Canadians,” said Kurl. Albertans in particular were more likely than not to think that the economy is too weak to support CPP expansion at this time.
Schirle thinks that concerns about the economy are overstated in this case. “This is a long-run policy. We’ve been doing this since 1966 through the booms and busts of the business cycle.” Previous changes to CPP have had little impact on employment and the economy, she said, so she doesn’t expect any yet-to-announced changes would either.
The poll was conducted by the Angus Reid Institute through an online survey from a representative randomized sample of 1,515 Canadian adults.
With files from Vassy Kapelos. Graphic by Janet Cordahi.
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