Since the end of 2012 there have been those for and against the proposed increases to Canada Pension Plan premiums. If the proposed increases goes through, we’ll all have to pay more out of our own pockets, including those of us that are self-employed home renovators, contractors, home trades and others.

Could this proposed CPP premium increase be a bad thing? I’m sure many small self-employed renovation contractors, trades and home services people are counting on CPP being around when they retire. With life’s daily grinds in the self-employment world, at least there will be some money guaranteed down the road – but that will only come if the current rates are increased. Yes, that means digging a little deeper into our pockets now, but the rewards could be worth it in the end.  

The problem is, it’s very difficult for many contractors to absorb CPP increases in the context of all the other new, extra funds we are expected to pay to government and regulatory bodies in the past couple of years. The harmonized HST took a big chunk off our profits in Ontario (and other provinces) as well as squashing our customers’ renovation intentions. Then in January of this year, WSIB was dramatically extended to types of contractors that had not had to pay it before (including owners). Now we have the Ontario College of Trades starting OFF with a mandatory fee of $120 for anyone that wants to keep their current Certificate of Qualification… and that $120 is just the first-year fee. Who knows how high that fee will go. You don’t get to vote for the College of Trades board of directors. They can yank that fee upwards any time they want. And they probably will!

But let’s not lump everything into the one pile, as some would want you to believe. CPP is NOT another tax, although organizations like the CFIB (The Canadian Federation of Independent Business) would like you to think it is. That word “tax,” alone, is enough to rile people or cause a revolt, as most of us are now disgusted with paying so much extra money out of out pockets these days.     

Ken Georgetti, president of the Canadian Labour Congress, gets it right and describes the CPP increase as a PENSION and not a tax. He then adds in an article. “It’s time to end the free lunch enjoyed by employers who refuse to provide a pension at work. Increasing CPP benefits will improve the retirement incomes of the vast majority of Canadians.”

Pensions have been slashed over the years as corporations got rid of them or made them almost non-existent. How did this occur? One reason I believe is corporate greed, cutting expenses, like benefits and pensions, which keeps shareholders happy with their returns on investment.

Even one of our largest construction companies in Canada: Ellis Don (Toronto Star 31, August) wants government intervention to make them more competitive in the market, by shedding the bonds on a closed-shop union agreement they signed over 50 years ago. Now they want to bring in non unionized workers, lowering pay, with no benefit or pensions. So another good reason to pay more into CPP for every person’s future well being.  

Government pensions are under attack and I’m not talking about all these fat cats in Parliament Hill or bureaucrats provincially. I mean ordinary hard working peoples’ private pensions. South of the border, in Rhode Island, there’s Paul St George (Toronto Saturday Star 31, August 2013) who worked in the fire department for 19 years (hopefully not a firefighter in construction.) He was promised an annual $36,000 pension upon retrial. When his turn came, his union agreed to open up their agreement, just like Ellis Don is asking now, however this time it was his city that opened it up and his pension dropped to $24,000 annually. He and others lost about 30 per cent of their retirement income overnight. Where’s the future in that for working people?

We need to maintain a strong government CPP pension scheme, including for the self employed. The CFIB (The Canadian Federation of Independent Business) tag line says: Powered by Entrepreneurs. Not that it does not say Powered by People. Could we class companies like Ellis Don as “entrepreneurs”?

The CFIB says the CPP  increase will be between 30% to 60%.  Where did they get these amounts, especially when at the same time in the Globe and Mail Jan 2013, Jim Flaherty, our federal finance minister, refers to a modest CPP increase.

The CFIB says: “These hikes would start immediately and continue for several years, BUT it could take as long as 40 years before Canadians receive the full benefit of those hikes.” My question to this is, did the people who retired this year not  have to wait about 40 years to get their present day pension? Do we not all have to wait till our time comes?

Is this about scare tactics?

As a self-employed small business owner myself, I’ve never been a union guy or ever carried one of their cards in my life. Yet I find myself on the side of the unions this time. I believe self-employed people will be counting on CPP to help fund their retirement. CPP  has to keep up with the times; I’ll gladly pay more now to help me later when I may need it. Here’s a bit of trivia: Who invented the weekends we’ve all come to enjoy today? Was it “entrprenuers” or unions? The answer is, of course, unions.

These comments are my personal thoughts and ideas and not the view of CARAHS . CARAHS is not affiliated with any unions, government or anyone else. We are a completely independent non profit association delivering education, information and benefits.

So tell us what you think on this proposed CPP increase? Do you feel that  by paying a little more now, you will benefit down the road, when you try to retire?

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