New Brunswick joins federal government in approving enhancements to Canada Pension Plan02 March 2017
FREDERICTON (GNB) – Today the federal government announced that the Governor General has signed the order-in-council to bring into force Bill C-26, which will enhance the Canada Pension Plan (CPP) beginning in 2019. With this announcement, all necessary legislative requirements have been met by the federal and provincial governments.
“New Brunswick was proud to support the changes to the Canada Pension Plan,” said Finance Minister Cathy Rogers. “Today, we mark the final step in delivering an enhanced CPP that will give workers today and future generations a safer, more secure and dignified retirement.”
On June 20, 2016, New Brunswick joined the federal government and other provinces in an agreement in principle to recommend a modest and balanced incremental enhancement to the CPP.
The enhanced CPP will be phased in over a seven-year period beginning in 2019, which is meant to mitigate adverse impacts on the economy and provide businesses sufficient time to plan. The enhancements will provide more money to Canadians when they retire, so that they can worry less about their savings and focus more on enjoying time with their families, said Rogers.
The enhancement will increase the maximum CPP retirement benefit by about 50 per cent for New Brunswickers. The current maximum benefit is $13,370. In today’s dollar terms, the enhanced CPP represents an increase of nearly $7,000, to a maximum benefit of about $20,000. It will take about 40 years of contributions for a worker to fully accumulate the enhanced benefit.
“Because of lowering employment insurance premiums, and because it will be phased in over time, this will minimize the impact on individuals, businesses and the economy,” said Rogers.
To ensure that eligible low-income workers are not financially burdened as a result of the extra contributions, the federal government will enhance the Working Income Tax Benefit, which is designed to help keep people in the workforce and encourage others to join it.