Many employers operate in industries where it is necessary to
control and be ever-vigilant with respect to rising expenses. Many
industries offer slim profit margins and, as with the minimum wage
increases in various jurisdictions in 2018, this can have an impact
on profitability as well as planned staffing levels for many
employers. With this in mind, there seems to be little attention
being paid to the upcoming increases in employer and employee
contributions to the Canada Pension Plan
("CPP")1 to commence
effective January 1, 2019.
What are the CPP contribution increases
about2 – Put very simply,
starting in 2019 (albeit phased-in) CPP benefits will increase in
two broad ways. First, the basic CPP benefits will increase from a
target replacement ratio of 25% of a contributor's average
"pensionable earnings" over an estimated 40 years of
contributions to 33.3%. Secondly, starting in 2024, an extra
tranche of earnings will be added to what constitutes
