June 21, 2016 2:01 pm

CFIB ‘disappointed’ with Saskatchewan government agreeing to CPP hike

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The Canadian Federation of Independent Business (CFIB) says it is “disappointed” the Saskatchewan government agreed to a payroll hike when it agreed to expand the Canada Pension Plan (CPP).

“Entrepreneurs were counting on the Saskatchewan government to show strong leadership and say no to CPP hikes,” said Marilyn Braun-Pollon, the CFIB’s vice-president for Prairie & Agri-business.

“We are frustrated the government’s position changed.”

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READ MORE: Feds, most provinces agree on CPP reform; premiums to increase in 2019

According to the CFIB, 78 per cent of small business owners in Saskatchewan oppose a mandatory CPP premium hike, with another 62 per cent stating it would put pressure on freezing or cutting salaries and 27 per cent saying it would force them to lay off employees.

Saskatchewan Premier Brad Wall defended his government’s change of mind in a Facebook post on Tuesday.

“When it became clear the federal government had the numbers they needed for a deal,” Wall wrote, “Saskatchewan worked to achieve a compromise by delaying the start date of the enhancement until 2019 and the phased-in implementation by one year to 2025.”

Under the agreement, contributions for a typical worker earning about $55,000 would initially increase by $7 a month starting in 2019, and employers would match those contributions.

READ MORE: Worried they’ll outlive their savings, 3 in 4 Canadians want CPP expansion: poll

The plan will be phased in over seven years until 2025 and it means when people retire their maximum annual benefits would increase by about one-third to $17,478.

“The last thing Saskatchewan businesses need is a payroll tax hike, which will impact their business and certainly affect their employees,” Braun-Pollon stated.

Braun-Pollon also noted that the CFIB had received a letter last week from Saskatchewan Finance Minister Kevin Doherty stating the province preferred “voluntary efforts to improve retirement savings over mandatory solutions.”

“Saskatchewan had a choice to make the CPP changes better by going slower with an extended implementation period, or sitting it out and risking that a more aggressive plan like the Province of Ontario’s would be implemented nationally,” wrote Wall.

READ MORE: 5 things you need to know about proposed CPP deal

A change to the CPP needs the consent of Ottawa and a minimum of seven provinces representing at least two-thirds of the country’s population.

Provinces will have until July 15 to officially sign on to the agreement before it becomes formalized.

With files from Kevin Nielsen and The Canadian Press

© 2016 Global News, a division of Corus Entertainment Inc.

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