Enhancing the Plan

To improve the retirement income of future generations, a meeting of Canada's finances ministers was held in June 2016 to discuss the enhancement of the Canada Pension Plan (CPP). During the meeting, the Ministers of Finance from nine Canadian provinces signed a tentative agreement on the proposed enhancement option, Québec did not sign. In December 2016, the Government of Canada adopted a bill to implement the enhancement of the Plan. Québec decided to consult its population to ensure that the Québec Pension Plan (QPP) would be adapted to the needs and realities of Quebeckers.

The 3 proposals are:

  1. The enhancement of the CPP, which would
    1. ensure the CPP enhancement is applied to the QPP for all workers
    2. increase from 25% to 33.3% the income replacement rate of retirement pensions under the QPP
    3. increase from $54 900 to $62 600 the maximum employment earnings on which contributions can be made
    4. increase the contribution rate to the QPP from 2019 to 2025
    5. increase the federal tax credit for individuals with low incomes.
  2. The enhancement proposed by Québec, which would
    1. increase QPP benefits for individuals whose employment income is $27 450 and higher
    2. increase from 25% to 33.3% the income replacement rate of retirement pensions under the QPP (The rate will remain 25% for the first employment income bracket of $27 450)
    3. increase from $54 900 to $62 600 the maximum employment earnings on which contributions can be made
    4. increase the contribution rate to the QPP from 2019 to 2025 except in the case of low‑income workers whose income is less than $27 450
    5. provide an additional income exemption for the purpose of calculating the Guaranteed Income Supplement (GIS) in order to immediately increase the income of low-income seniors.
  3. The status quo, which entails
    1. not enhancing the QPP
    2. keeping the maximum employment earnings on which contributions can be made at $54 900 (in 2016)
    3. keeping the contribution rate at 10.65% in 2016 and 10.80% in 2017. As of 2018, an automatic adjustment mechanism would make it possible to align the contribution rate with the steady-state rate
    4. keeping the income replacement rate of retirement pensions under the QPP at 25%.
Animation

Enhancing the retirement system? (French only)

 
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