Retirement savings in this country has been a hot topic of late,
and yesterday evening in Vancouver the federal government and (most
of) the provinces announced that they have reached a deal to expand
the Canada Pension Plan. The deal must be approved by July 15 of
The proposed changes will roll out over seven years, beginning
in 2019, and mean both a bigger benefit to retirees and bigger
monthly contributions by employers and employees.
Under the current CPP, employers and employees each contribute
4.95% of income between $3,500 and $54,900. The proposed plan would
see that annual pensionable income increase up to $82,700 by 2025.
For example, contributions for a typical worker earning about
$55,000 would initially increase by $7 a month in 2019, eventually
increasing to $34 a month in 2025. Employers would match those
The current CPP replaces 25% of earnings up to $54,900, with a
maximum CPP benefit of $13,110. The average annual payment is
$7,974.84. The expanded CPP would aim to replace one third of
income up to the new $82,700 ceiling. The maximum annual payout
would increase by about one third to $17,478.
CPP reform requires the approval of the federal government and
seven of the provinces containing two thirds of Canada's
population. All of the provinces except Manitoba and Quebec have
signed on to the agreement announced yesterday. Quebec Finance
Minister Carlos Leitao said he supported the agreement but that
Quebec would be proposing an alternate version of the expansion in
What about the ORPP?
Ontario's Finance Minister, Charles Sousa, has announced
that this new deal will signal the end of his government's
proposed Ontario Retirement Pension Plan.
What does this mean for you?
These changes raise many important issues for unionized and
non-union employers across Canada. We will be providing further
insights as things develop and more details become available.
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On Thursday, September 22, 2016, Dentons hosted a panel discussion about the management of liabilities and risks associated with environmental crises, including potential liabilities for directors and officers and provided insight into risk and liability techniques associated with environmental crisis management.
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