August Community Newsletter Insert
The summer provides an opportunity for families to spend time together. As we begin to close in on back to school time, I wanted to take a moment to report to the constituents of Calgary Signal Hill on an issue that will have a dramatic impact on your pay cheque. As you may be aware, the Minister of Finance recently announced changes to the Canada Pension Plan (CPP) that will result in a significant hike in payroll taxes for business, and mandatory payroll deductions for employees.
If you earn $30,000/year, you’ll take home $215 less.
If you earn $60,000/year, you’ll take home $565 less.
If you earn $90,000/year, you’ll take home $1,098 less.
If you are a business owner, there will be increases in the mandatory employee contributions paid out by you, the employer, which will result in higher operating costs and potential layoffs.
It is critically important to save for retirement and for those “rainy days” that we sometimes see in our lives. However, I believe that dramatic payroll tax hikes are not the solution to ensuring that we all save enough for retirement. You should be able to make your own choices about when, and how you save for your retirement using tools such as Registered Retirement Savings Plans (RRSPs), Tax Free Savings Accounts (TFSAs), and other investments.
This dramatic payroll tax hike directly hurts families, particularly those who are planning on retiring in ten years or so. While you will pay significantly more into the plan because the income limit is now much higher, you won’t see the same benefit paid out upon retirement.
It also will be of no net benefit to seniors, since the increased benefits will take almost a decade to phase-in.
Instead of doing a study via the Finance committee regarding this decision and other options that could potentially fortify retirement savings for all Canadians (including those near retirement), the Minister has decided to take a different course and simply push the changes through.
If you have thoughts on the CPP changes or any other matter you feel is important, please call my office at 403-292-6666