Finance Minister Bill Morneau is downplaying the cost of increasing Canada Pension Plan contributions, arguing they'll be gradual and modest for employees.
But it's still not clear exactly how much the increase will cost the federal government or the economy, as employers take on their share of the increase.
In an interview with Bob Fife, host of CTV's Question Period, Morneau called the agreement historic, with eight of 10 provinces agreeing to phase in the change from 2019 to 2025.
"It's very gradual, it allows people to prepare, but gives them the benefit over the long term that's so important for people that need to have enough for a dignified retirement," Morneau said, promising to provide exact figures "in the coming days and weeks."
"We want to make sure [the numbers are] accurate. But what I can tell you is that they're very modest and they come in very gradually," he said.
Morneau said the increase won't impact workers' paycheques "in any way that's significant."
Further, he said, because Employment Insurance costs are coming down, "for employers, they're going to see that the net cost is not significant."
The Liberals promised in their election platform to enhance CPP to improve the payout by the time younger Canadians reach retirement age, pointing to a CIBC report that said those Canadians are saving less than their parents did at the same age, and citing a decline in workplace pension plans. Last week, most of the provinces agreed to increase CPP contributions to boost the payout from a quarter to a third of pensionable earnings.
Finance officials estimate the CPP increase will cost employees and employers each an average of about $3 every two weeks in 2019, ramping up to an average of $20 in 2025.
Conservative MPs argue the Liberals are raising taxes at a time when the economy is fragile in provinces also facing a steep decline in oil prices, which will make it harder for businesses in those provinces to survive.
