by Morinville News Staff
New analysis from the Canadian Federation of Independent Business showing 64,000 fewer jobs by the mid-2020s has the organization urging caution that the government may have underestimated planned Canada Pension Plan (CPP) increases.
CPP premiums will rise for five straight years starting in 2019 and be followed by another two years where the maximum amount of income CPP premiums are levied upon will increase.
The CFIB study was conducted by the University of Toronto’s Policy and Economic Analysis Program. The study found that the CPP hike will initially result in 64,000 fewer jobs, 4.5 times greater than the federal government’s projection of job losses.
The analysis indicates the negative job impact will last until the late 2020s, ultimately resulting in higher government deficits.
“Employers will naturally respond to increased labour costs by looking for ways to streamline their labour needs, by adding new technologies or focusing hiring on higher-skill workers. The result is that lower skilled – generally younger workers or new Canadians – are likely once again holding the short end of the employment stick,” said Ted Mallett, CFIB chief economist. “The CPP debate focused too much on the false premise that employers don’t pay enough for their employees’ retirements, and not enough on finding the best savings model to meet Canadians’ needs.”
CFIB President Dan Kelly said the CPP hikes are just the latest cost increases to Canadian businesses that have already seen Employment Insurance (EI) premium increases, minimum wage hikes and other regulatory costs added to their books over the last year.
“While some suggest it is short-term pain for long-term gain, one has to wonder how much more pain Canadian business owners can be expected to take?” Kelly said.
The business organization is calling on the federal government to recognize the upward creep of policy-induced labour costs across the country and provide payroll relief in next week’s budget.
The full study: Forced Savings: the hidden costs of expanding public pensions is available online at https://www.cfib-fcei.ca/sites/default/files/2018-02/report-cpp-increase-2019.pdf.
