06-22-2006, 04:17 AM
Ottawa considers reducing CPP contributions
Updated Wed. Jun. 21 2006 9:12 AM ET
CTV.ca News Staff
Prime Minister Stephen Harper's fall agenda may include an announcement to reduce Canada Pension Plan contributions for workers and employers, a move which could boost take-home pay, according to a newspaper report.
The Globe and Mail reported Wednesday that the Tories are considering using some of the annual federal surplus to pour cash into the CPP, which could allow Ottawa to cut premiums.
The measure -- which could be billed as a move akin to a tax cut because it would offer paycheque relief -- could be announced in the fall and included in the spring budget.
It's unclear what the reduction would amount to.
Currently, workers pay a rate of 4.95 per cent on their annual pensionable earnings to a limit of $42,100. The maximum individual contribution is $1,910.
Employers pay an equal sum, bringing the joint contribution amount to 9.9 per cent, or a maximum of $3,800 annually.
Canadians who are self-employed fork over the combined 9.9 per cent rate.
The rate is considerably higher than what it was 40 years ago, when the combined CPP contribution rate equalled 3.6 per cent.
Such a proposal would require an amendment to the CPP legislation, for which Ottawa would need the consent of at least two-thirds of the provinces.
The Globe and Mail reported Harper's agenda will also include a package to fix the fiscal imbalance, with measures to boost equalization and other provincial transfers.
The topic is likely to be on the table next week at a Canadian finance ministers' meeting at Niagara-on-the-Lake, Ont., where Ottawa and the provinces are to discuss ways of addressing the contentious fiscal imbalance.
The equalization scheme redistributes funds from Canada's so-called "have" provinces to their poorer counterparts -- the "have-nots." This is done to ensure all provinces offer a comparable level of public services across the country.
Updated Wed. Jun. 21 2006 9:12 AM ET
CTV.ca News Staff
Prime Minister Stephen Harper's fall agenda may include an announcement to reduce Canada Pension Plan contributions for workers and employers, a move which could boost take-home pay, according to a newspaper report.
The Globe and Mail reported Wednesday that the Tories are considering using some of the annual federal surplus to pour cash into the CPP, which could allow Ottawa to cut premiums.
The measure -- which could be billed as a move akin to a tax cut because it would offer paycheque relief -- could be announced in the fall and included in the spring budget.
It's unclear what the reduction would amount to.
Currently, workers pay a rate of 4.95 per cent on their annual pensionable earnings to a limit of $42,100. The maximum individual contribution is $1,910.
Employers pay an equal sum, bringing the joint contribution amount to 9.9 per cent, or a maximum of $3,800 annually.
Canadians who are self-employed fork over the combined 9.9 per cent rate.
The rate is considerably higher than what it was 40 years ago, when the combined CPP contribution rate equalled 3.6 per cent.
Such a proposal would require an amendment to the CPP legislation, for which Ottawa would need the consent of at least two-thirds of the provinces.
The Globe and Mail reported Harper's agenda will also include a package to fix the fiscal imbalance, with measures to boost equalization and other provincial transfers.
The topic is likely to be on the table next week at a Canadian finance ministers' meeting at Niagara-on-the-Lake, Ont., where Ottawa and the provinces are to discuss ways of addressing the contentious fiscal imbalance.
The equalization scheme redistributes funds from Canada's so-called "have" provinces to their poorer counterparts -- the "have-nots." This is done to ensure all provinces offer a comparable level of public services across the country.