Canada’s pension system has room for improvement: Report


VANCOUVER (NEWS1130) – A new report is suggesting several ways the federal government could improve the country’s pension system.  It includes expansion of the Canada Pension Plan (CPP) to allow larger contributions.

Critics of this strategy have complained about the impact on business, as expanding CPP would increase payroll taxes. Report co-author Jack Mintz with the University of Calgary’s School of Public Policy says there is a way to mitigate that problem.

“And there we suggest if we also increase the eligibility age from 65 to 67, which would make a lot of sense given that people are living much longer (…) that actually will mute any increase in payroll taxes to pay for additional benefits,” he says.

Mintz says the change also would allow retiring workers to draw a larger maximum pension, rather than having to rely on the guaranteed income supplement (GIS).  The age increase would have to be phased-in to protect older workers who’ve been paying into the pension system for years.

“But it would be a real help for younger people today,” he adds.  “At least when they do end up in the retired years they could count on a certain floor of income.”

The report makes several other recommendations, including making CPP contributions deductible from taxable income, like  RRSP investments, to encourage workers to maximize contributions.

It suggests treating group RRSPs like defined-contribution registered pension plans (RPPs), another move that would reduce payroll taxes, and upping the age limit for RPP and RRSP contributions from 71 to 75 years to reflect the increase in life expectancies.


  • Allowing RRSP contributions to be altered to allow lifetime averaging, allowing workers to take advantage of additional contribution room.
  • Increased contribution limits on Tax-Free Savings Accounts
  • Creation of a capital-gains deferral account to allow investors to sell off underperforming assets, without fear of triggering a tax bill, as long as they reinvest the proceeds.


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