FORT ST. JOHN, B.C. – The BC government is moving to try and ensure there’s better province-wide public understanding of the impact of what it calls in a news release, the proposed enhancement of the Canada Pension Plan.
It has announced a new online summertime consultation process over the proposed changes, which as reported earlier will raise premiums, enhance benefits, and be phased in over seven years starting in 2019.
The government release confirms the income replacement rate will be increased from one-quarter to one-third of insured eligible earnings, and thus workers who retire after contributing to the enhanced system will see their monthly CPP benefits increased.
It also notes the upper insured earnings limit will be increased to $82,700 in two steps in 2024 and 2025, an increase of about 14% from its projected level in 2023.
As a result, for workers earning above the current maximum, this means that more of their income will be covered by CPP and they will receive increased CPP benefits when they retire.
Following last month’s pension plan talks, eventually every province except Quebec backed the agreement-in-principle, and all the signatories, including BC, agreed to last Friday’s ratification deadline.
However on Friday the BC government issued its statement saying it has decided not to ratify the agreement just yet, because it needs more time to explain the deal to BC residents and businesses.
A spokesman for Finance Minister Mike de Jong added the province could make a ratification decision by the end of the summer and the Federal Finance Minister says BC’s delay will not derail Ottawa’s plan to table new legislation this fall.
These are the same CPP changes that a study released last week by the Fraser Institute suggested would give workers, especially younger ones, a “meagre” return, and to learn more about them and to provide feedback you can visit: engage.gov.bc.ca/canadapensionplan/.