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Canada Will Not Hike Pension Payroll Tax

by Mike Godfrey, Tax-News.com, Washington

14 July 2015


Canadian Finance Minister Joe Oliver has said the Government will not impose a mandatory increase in Canada Pension Plan (CPP) contributions but will instead consider options for a voluntary supplement to the payroll tax.

Oliver said: "We believe in offering Canadians choice in retirement savings options. What we do not believe in are reckless tax hikes that would kill jobs at the very time when Canadians need more jobs, not less. Hiking payroll taxes would take money out of the pockets of hard working Canadian families that need the money to pay for basic necessities like groceries, gas, and housing."

The Government will consult with individuals, the finance sector, retirement income experts, and stakeholders on "a voluntary CPP option that would build on past initiatives like creating Tax-Free Savings Accounts and enhancing Guaranteed Income Supplement benefits," Oliver explained.

With some exceptions, employees over the age of 18 who work in Canada (outside Quebec) and earn more than CAD3,500 (USD2,738) a year must contribute to the CPP. Half the required contributions are paid by the employer. A self-employed person makes the whole contribution.

TAGS: individuals | tax | investment | pensions | employees | retirement | payroll | Canada

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