Is a straight increase in the CPP the answer?
A recent Globe and Mail article says the Federal government is asking all Canadians to submit our ideas (by e-mail) about options for voluntary saving through the CPP.
The Federal Liberals and NDP have advocated for increases in CPP benefits, while the Tories have not. I don’t know how each party arrived at its position.
I do know that, this past February, there were 825,622 British Columbians receiving CPP benefits. In March, that number rose to 828,522, and in April (the latest month for which we have figures) it rose again to 830,615.
So as of April, if each British Columbian were receiving the maximum CPP benefit (about $1,065 per person), the CPP paid almost $900,000,000 in one month, just to B.C.
As more of us reach age 65, the CPP will pay out even more. So I presume that the government is concerned about the long-term ability to afford a straight increase in the monthly CPP benefit.
It may be preferable to change the formula for benefit calculation, so that people with lower incomes receive more while people with “other income” (beyond CPP and OAS benefits) receive the existing amounts.
Answers are hard to come by, but they have to make long-term sense.
This ad ran in the Richmond Review on July 17, 2015.