The rate of return Canadians—especially younger workers—will receive on their CPP contributions is meagre and will remain so even after expansion.
Canadians born in 1971 or after can now expect to receive a meagre rate of return from their CPP contributions of between 2.3 per cent and 2.5 per cent (depending on their specific year of birth).
The returns of the CPP's investment arm in no way influence the CPP retirement benefits received by Canadian workers.
The rate of return under the current CPP system is 2.1 per cent for Canadians born after 1971.
A narrow focus on pension assets overlooks non-pension assets such as stocks, bonds, real estate and other investments.
The latest tax increase is the payroll tax hike that will be used to finance CPP expansion.
The CPP tax increase is just one of many tax increases imposed by the new federal government on middle-income Canadians.
Proposed changes could result in thousands of dollars in extra contributions from working Canadians every year.
On Monday, Canada’s finance ministers announced an “agreement in principle” to expand the Canada Pension Plan (CPP), which will force Canadians to contribute more to the program.