Federal Finance Minister Bill Morneau is touring New Brunswick to highlight what the Liberal government has done since coming to power.
He spoke about the middle class tax cuts, a simplified child care benefit, and the changes to the Canada Pension Plan.
“So, our view around pensions in Canada, is that Canadians are increasingly challenged, companies have closed down pension plans, and many people aren’t saving enough for retirement,” says Morneau. “So what we set out to do with the provinces is to enhance the Canada Pension Plan.”
He was asked to clarify the CPP changes.
“We’re going to take the Canada Pension Benefit from 25% of earnings that are covered up to one-third and that will happen over time as people put more money into the CPP,” says Morneau.
He says the expected wave of retirements from the Baby Boomer generation is not going to put undue stress on the fund.
“So nobody retiring now will have any concerns around the funding of their Canada Pension Plan, in fact the actuary has told us that it’s stable for 75 years,” says Morneau. “So what we’re really doing is looking towards the next generation of Canadians so that we can ensure they save enough for a dignified retirement.”
Apart from the boost to the income replacement, they are raising the maximum amount of income subject to CPP by 14%, to a target of $82,700 by 2025.
