Government can do more by doing less, by unleashing the private sector
Federal government schemes and programs to ameliorate the devastation wrought by the ill-considered shutdown of the Canadian economy for nearly three months have focused on compensating individuals and businesses for being unemployed or shutting down. Little thought, thus far, has been given to how to relaunch the economy for a sustained recovery from COVID-19. The…
When it comes to how and how much workers should save for retirement, the federal government doesn’t know better than Canadians themselves
As the calendar flipped to 2020, the federal government again made the Canada Pension Plan (CPP) tax more expensive, even though CPP doesn’t help the economy or workers. The combined employee and employer contribution rate has risen from 10.2 per cent in 2019 to 10.5 per cent this year, while the maximum taxable amount (but…
Can you afford to hold off and increase your payments later? Will you need more CPP and OAS later in life? And how long do you expect to live?
Most people know they can start collecting their Canada Pension Plan (CPP) at age 60, even though they’ll get smaller monthly payments than if they waited until 65. Many people just want the money now and don’t care about any added benefits to delaying CPP and Old Age Security (OAS). The standard CPP and OAS…
Never mind that reducing the choices available to a fund manager can result in negative consequences for pensioners
Some Canadian institutional investment and pension funds have faced scrutiny recently because they owned or own shares in American prison-management companies GEO and CoreCivic. That criticism is unwarranted and unfair. These firms operate prisons, detention centres and rehabilitation facilities in the U.S. Given that the U.S. incarcerates more people than anywhere else in the world,…
But much of the justification for expanding the pension plan is debatable or downright wrong
By Jason Clemens, Jake Fuss and Milagros Palacios The Fraser Institute Canadians likely noticed that their first paycheque of 2019 was slightly smaller than in 2018, even if they got a raise. The decline in after-tax income is because the first of several tax increases to finance an expanded Canada Pension Plan (CPP) took effect…
When the government makes employment more expensive, the sure result is fewer jobs
The federal government began 2019 by taking a bigger bite out of workers’ paycheques: the combined employer and employee Canada Pension Plan payroll tax rose from 9.9 per cent of earnings to 10.2 per cent. It’s the first of five annual payroll tax hikes. By the time the CPP tax hike is fully phased in, a…
Governments around the world will go into the next recession with fewer economic management tools at their disposal
Government deficit and debt numbers in Canada are rising due to accounting changes made to better reflect the true nature of government liabilities. Ontario recently revised its deficit and debt projections (based on advice from its auditor general) to better reflect the true costs of pension liabilities and its electricity programs. And because of the…
To have effective policies, we need clear, understandable indicators for the most important dimensions of poverty
The federal government is to be congratulated on its just-released Poverty Reduction Strategy. The strategy, running to over 100 pages, endorses the idea of an official poverty line, relieving Statistics Canada from the impossible task of finding a purely statistical basis of definition. It further endorses the idea that poverty has many dimensions – including…
Private pensions face regulatory burdens that the Canada Pension Plan does not
By Moin A. Yahya and Charles Lammam The Fraser Institute In 2016, in fulfillment of a campaign promise, the federal government reached an agreement with the provinces to expand the Canada Pension Plan. Consequently, mandatory CPP contributions from working Canadians will increase steadily between January 2019 and 2025. Expansion proponents have used many faulty claims…Canadians receive meagre rates of return on CPP contributions and the program has other key shortcomings
By Charles Lammam and Hugh MacIntyre The Fraser Institute Misperceptions plague the public’s view of the Canada Pension Plan (CPP), despite efforts to provide some clarity. Mark Machin, chief executive officer of the Canada Pension Plan Investment Board (CPPIB) – the organization tasked with investing CPP contributions – recently hit the road in a cross-country…