The Canada Pension Plan (CPP) retirement pension was implemented in 1966, and it provides a monthly benefit to eligible Canadians. From its inception, the CPP was intended to be a supplement to a worker’s own savings for retirement. Proponents of CPP reform insist enhancements are needed because those workers who earn between $35,000 and $100,000 do not save adequately for their own retirements, and younger workers face low incomes and high debt, and, in many cases, no private pension is available for them, so they will be wholly reliant on CPP.

From 1987 to 2003, the contribution rate was increased in steps from 3.6 per cent to 9.9 per cent; however, those increases have not kept pace with the economy, cost of living, and current financial practices of many Canadians. Canadian finance ministers agree that there is a serious shortfall in CPP funding compared to projected benefits to be paid; however, Premier Brad Wall and his supporters believe the Canadian economy is not currently strong enough as a whole to support increased contributions from employers or workers. He encourages reform that is based on a wider view of financial stability across the country and not just based on dispersed pockets that are stronger economically.

To be eligible for CPP, a person must have worked and made at least one valid contribution to the CPP. With only a few exceptions, every person over 18 years of age, who works in Canada outside of Quebec, and who earns more than a minimum amount ($3,500/year) must contribute to the CPP. At age 70, contributions are no longer required. Employers share the contribution amount equally with their employees; however, self-employed persons pay the entire contribution for themselves. Benefits of the CPP include a retirement pension; post-retirement benefit; disability benefits; and benefits after death which may be paid to an individual, or, in certain circumstances, the person’s family. The amount of the benefit payment(s) is dependent on how long and how much the person (or the person’s employer) has contributed.