CPP increase will raise family costs by more than $2K: report

More than 90% of Canadian families with children will pay more once Canada Pension Plan (CPP) increases are fully implemented, finds a new study by the Fraser Institute.

The first of seven increases to what the institute calls the “CPP tax” starts January 2019. (In the study, the institute acknowledges that some may not view CPP contributions as a tax. It says its definition of a tax is “a compulsory contribution for the support of government facilities, programs or services.”) The increases will be fully implemented in 2025.

The study measures the impact of the fully implemented CPP increases, as well as the government’s personal income tax changes already in place, on the taxes that Canadian families will pay. (A family is defined as a parent or parents with a child or children under age 18.)

The study finds that once fully implemented, virtually all (almost 99%) middle-income Canadian families with children (incomes ranging from $77,839 to $110,201) will pay more—on average, $2,260 more each year.

When looking at all families with children in Canada (excluding Quebec) regardless of income, about 92% will pay more—about $2,218 more each year.

Read the full study.

This post was updated on Jan. 11, 2018, to reflect the Fraser Institute’s definition of tax.

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