The Canadian Federation of Independent Business (CFIB) has sent a letter to provincial and territorial finance ministers, saying that business owners cannot afford to pay more into the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) in today's fragile economy.
When Canada's finance ministers met on Sunday and Monday, the CFIB urged them to reject plans to increase CPP/QPP premiums and argued that higher contributions would do significant short-term damage to the economy.
"The current proposal would slow job growth by 110,000 positions by 2020 and swell combined federal and provincial deficits by $10 billion. It would also permanently depress workers' wages by almost 1%. The benefits from future CPP benefits would take many more years to show up," argues the CFIB.
The association says that if CPP premiums go up, two-thirds of small business owners would feel increased pressure to either freeze or cut salaries and 35% would be forced to downsize staff.
"The proposed CPP hike is a solution looking for a problem," comments the CFIB's chief economist Ted Mallett. "And the irony is that it's going to create a big problem, in the form of serious, up front negative effects on the economy, and on government budgets."