Tories' CPP Voluntary Contribitions - Good Politics, Good Policy

Keepitsimple · May 27, 2015

Great idea. Too late in my career to take advantage but for young people, it's a retirement blessing. The big value is having a no-muss, no-fuss deduction from your pay - after a while, you don't even notice it. I hope it works its way through to legislation.

There's no doubt that the timing smacks of Politics - it preempts any attempts by the opposition to showcase a CPP revamping by increasing employer/employee contributions (referring to that as an increase in job-killing payroll taxes) and takes a poke at Kathleen Wynne at the same time.

Every now and then - good politics can make for good policy. A pleasant surprise.

Edited May 27, 2015 by Keepitsimple

msj · May 27, 2015

I like this policy.

I used to not pay into CPP for a while - paid myself dividends from my corporation so didn't have any income subject to CPP.

It worked fine but then the Feds and BC changed the tax rates on dividends and it was enough for me to go back to paying into CPP.

Since I'm self-employed there is no doubt that I pay the full 9.9% cost on it which is about $4,900 or so this year (maximum amount).

Overall, the cost to me when I factor in dividends with no CPP versus taking wages and paying into CPP, nets out to about $2,800 or so per year.

So, $2,800 per year to get me a pension of ~ $11,000 ish when I'm 65. Not bad assuming I make it to 65 and then assuming I live to 75+.

I loathe the idea of the LPC or NDP raising CPP premiums. I am ok with what I do now.

I also have several employees who I pay CPP for so it would be another cost to doing business.

Having said that I'm still a one issue guy for this election - CPC are for the Northern Gateway Pipeline so I'm still not voting for them even though they are finally putting together some good policies (this and TFSA's).

jacee · May 27, 2015

Great idea. Too late in my career to take advantage but for young people, it's a retirement blessing. The big value is having a no-muss, no-fuss deduction from your pay - after a while, you don't even notice it. I hope it works its way through to legislation.

There's no doubt that the timing smacks of Politics - it preempts any attempts by the opposition to showcase a CPP revamping by increasing employer/employee contributions (referring to that as an increase in job-killing payroll taxes) and takes a poke at Kathleen Wynne at the same time.

Every now and then - good politics can make for good policy. A pleasant surprise.

We agree.

.

Topaz · May 27, 2015

IF the Tories really care about Canadians after giving income splitting to seniors and now to Canadians who really don't needs it, they would GIVE more to those seniors who need the help, with an increase from CPP. I understand now, that the Tories want to increase the age for OAS to 67 also. So, it seems to me, under a Conservative (Alliance really) that their attitude towards future seniors, is tough, go on welfare, let the provinces look after you! BTW, how many Canadians can afford to lose more money out of their pay cheques....only the well off.

msj · May 28, 2015

IF the Tories really care about Canadians after giving income splitting to seniors and now to Canadians who really don't needs it, they would GIVE more to those seniors who need the help, with an increase from CPP. I understand now, that the Tories want to increase the age for OAS to 67 also. So, it seems to me, under a Conservative (Alliance really) that their attitude towards future seniors, is tough, go on welfare, let the provinces look after you! BTW, how many Canadians can afford to lose more money out of their pay cheques....only the well off.

1) They have already raised the age to get OAS for people born after 1963 (with a graduated scale for those born between 1958 and 1962).

So that is already a given.

2) I doubt the proposed CPP scheme would give any additional money to people currently collecting CPP.

It sounds like you voluntarily pay more in and therefore get more out of it.

3) OAS and CPP are not the same thing - CPP is based on paying into it. the amount you receive in CPP is the result of decades of contributions and takes into account child rearing, maximum earnings, number of years of contributions, age when you start collecting (start early and get less; start the pension after age 65 up to age 70 and get a bonus).

OAS is based on being a Canadian resident and being 65/67 - if you have been here for 40 years then congratulations you get $545 per month.

Been here for 10 years? Then you get a lesser amount.

Both OAS and CPP are included in income and taxed. OAS, however, may also be clawed back at the rate of 15% if your income is above ~$72,000.

4) The OAS clawback has been significantly reduced since pension splitting allows a couple to split pension income (RRIF/defined benefit type pensions) and the deduction takes place before the OAS clawback calculation.

That is, the guy getting the $110,000+ Air Canada pension plus his OAS and CPP can split that $110,000+ pension with his wife who only receives a little bit of CPP (that is shared from his CPP).

As such, not only does this save them almost $4,000 in income taxes but also eliminates clawback - so they get to keep about $10,000 thanks to pension splitting.

In the meantime, I have to wait to 67 to get my OAS.

So, no, I do not like the CPC for this very reason.

cybercoma · May 28, 2015

Great idea now, but terrible idea when they were against it, eh boys?

msj · May 28, 2015

The only reason I think it is a great idea is because it is voluntary.

Which means I do not have to participate if I don't want to.

That is a big difference compared to the NDP and LPC who want to force me into it whether I want it or not.

Realistically, I can understand why CPC supporters would like this: it's pretty much a do nothing policy.

It's like organ donation - make the default for everyone to be a donor and force people to opt out and you get 90%+ of the population. Make it voluntary and you get 15% of the population (or whatever the real numbers are).

Big Guy · May 28, 2015

I believe the quote was ".. is now willing to consider ..." I suggest that they are also willing to consider withdrawing from Iraq and Syria, increasing social programs and making Santa Claus the next Attorney General.

I am now willing to consider that perhaps there is a chance that I might consider that this may be an election ploy with no commitment to implementation.

msj · May 28, 2015

Even better then!

Of course, as mentioned previously, makes no difference to me as I'm a one issue guy with that pipeline thing.

If it wasn't for that issue this could be the first time I would vote for a Harper led CPC.

Keepitsimple · May 28, 2015

I believe the quote was ".. is now willing to consider ..." I suggest that they are also willing to consider withdrawing from Iraq and Syria, increasing social programs and making Santa Claus the next Attorney General.

I am now willing to consider that perhaps there is a chance that I might consider that this may be an election ploy with no commitment to implementation.

Does that now mean you would consider voting for them? <_<

Big Guy · May 29, 2015

I have always considered voting for them as well as the Liberals, NDP and Greens. I will wait and see what the final policy package looks like, how much my local candidates are into their federal bosses policies and what happens during the campaign.

But you are correct, I am now willing to consider that perhaps there is a chance that if the opportunity presents itself and the financial atmosphere is conducive to the global trends that my vote should go to the party which can most definitively show a tendency towards my personal views at the time. That may or may not be the Conservative Party of Canada.

Keepitsimple · May 30, 2015

I have always considered voting for them as well as the Liberals, NDP and Greens. I will wait and see what the final policy package looks like, how much my local candidates are into their federal bosses policies and what happens during the campaign.

But you are correct, I am now willing to consider that perhaps there is a chance that if the opportunity presents itself and the financial atmosphere is conducive to the global trends that my vote should go to the party which can most definitively show a tendency towards my personal views at the time. That may or may not be the Conservative Party of Canada.

It would be nice if everyone could keep an open mind at election time - and not be blindingly partisan. Darn - I am still so frustrated (to say the least) that the Liberals did not choose Marc Garneau as a leader. Mulcair is my only alternative to the status quo - and I'm not yet comfortable with that.

TimG · May 30, 2015

Mulcair is my only alternative to the status quo - and I'm not yet comfortable with that.

The NDP is filled with left wing extremists who think ideology trumps common sense. It would be a huge risk putting them in charge. Trudeau is a much better option if change is the objective. At least you can count on Trudeau having a number of competent pragmatists in his cabnet.

Keepitsimple · May 30, 2015

The NDP is filled with left wing extremists who think ideology trumps common sense. It would be a huge risk putting them in charge. Trudeau is a much better option if change is the objective. At least you can count on Trudeau having a number of competent pragmatists in his cabnet.

I know....let's just say I was trying to keep a really open mind - and my brain fell out. It's just that Trudeau's incompetence, naivite, and impulsiveness are downright scary. I can't trust him to even trust those pragmatists we would hope would be there. Sadly, I don't see an alternative at this point in time.....but there's a few more months to go. At least it will be interesting this time round.

jacee · June 2, 2015

The NDP is filled with left wing extremists who think ideology trumps common sense.

:lol:

I think you mean they aren't 'employed' by the corporate machine like the Conservatives or the Liberals are.

Change can be a very good thing.

Once you get used to the idea, it's a very refreshing thought.

Look at the Alberta electoral map now: tiny pockets of affluent blue bosses amid a sea of orange working people.

Pause for thought ...

.

PIK · June 2, 2015

There is only one choice for PM and that is harper. Say what you want but the other 2 will destroy this country.

Wilber · June 2, 2015

The NDP is filled with extremists who think ideology trumps common sense.

That's also my problem with the Conservatives.

Keepitsimple · June 2, 2015

That's also my problem with the Conservatives.

That's where you look at the leaders. In seeking power, Harper was able to espouse right-wing, populist leanings - because he wasn't in charge. Upon obtaining power, it's clear that Harper has drawn his party - and more importantly his own policies - to the pragmatic center - albeit still leaning a bit right. Mulcair on the other hand is still seeking power and espouses left-wing, populist leanings. The problem with Mulcair is that we have no idea where he will go if he achieves power. Can he be a similar pragmatist? Will his voting base allow him to be? Can he make the shift to the pragmatic center and drag his supporters with him?

I actually think he can - but only to a degree. Left of center governance is always costly - whether it's $15 dollar a day daycare, a $15 minimum wage, National Pharmacare, etc. - and we can't really afford those kinds of policies at this point in time.

On Guard for Thee · June 2, 2015

The voluntary CPP contributions thing is just more electioneering blather from a man who is freaked out about the latest polls, and casting about for anything that might keep him from having to do a Charlton Heston with his grip on power. The administration costs alone of such a move would be huge, and so once again a CPC policy would again benefit mostly the wealthy portion of the population.

cybercoma · June 2, 2015

I think we should defer to the Conservatives on voluntary CPP.

Wilber · June 2, 2015

That's where you look at the leaders. In seeking power, Harper was able to espouse right-wing, populist leanings - because he wasn't in charge. Upon obtaining power, it's clear that Harper has drawn his party - and more importantly his own policies - to the pragmatic center - albeit still leaning a bit right.

Considering how much of this government's legislation can't get past the courts, not far enough.

Smallc · June 2, 2015

The voluntary CPP contributions thing is just more electioneering blather from a man who is freaked out about the latest polls,

He's freaking out at the polls that still have the Conservatives in 1st place with a 130 seat projection?

On Guard for Thee · June 2, 2015

He's freaking out at the polls that still have the Conservatives in 1st place with a 130 seat projection?

The polls that have all 3 parties within the sampling error of being completely neck and neck.

cybercoma · June 2, 2015

He's freaking out at the polls that still have the Conservatives in 1st place with a 130 seat projection?

What poll is that? There hasn't been a poll that has said the Conservatives are in the lead for awhile. All three parties have been in a statistical tie for the last month or more.

Smallc · June 2, 2015

What poll is that? There hasn't been a poll that has said the Conservatives are in the lead for awhile. All three parties have been in a statistical tie for the last month or more.

Based on the latest analysis from threehundredeight.

When calculating the averages, we end up with this:

http://www.threehundredeight.com/