Janet McFarland, Globe & Mail, July 10, 2016
Majority say impact on their business will be neutral or positive, survey shows Canadian business executives are supportive of plans to expand the Canada Pension Plan, with a majority saying it will have a neutral or positive impact on their business over the next decade, according to a new survey.
A Modus Research survey of 563 Canadian executives and managers found 58 per cent supported planned enhancements to the CPP and a further 12 per cent were neutral, while just 28 per cent said they opposed the move.
Business groups such as the Canadian Federation of Independent Business and the Canadian Chamber of Commerce have denounced the expansion plan, saying it is opposed by their members and amounts to an unaffordable new payroll tax.
But Modus Research chief executive officer Charlie Graves said his firm’s survey found only a minority of executives have major concerns, which he said is contrary to suggestions of widespread alarm among businesses.
“Generally most businesses don’t think it will have a big impact on them one way or the other,” Mr. Graves said. The federal government and most provinces announced June 20 that they had reached an agreement to slowly phase in an enhancement of CPP benefits, with premium increases beginning in 2019 and ramping up until 2025.
Workers and their employers contribute equally to the CPP, and premiums paid by each are expected to climb by one percentage point from 4.95 per cent of earnings currently to 5.95 per cent once the increase is fully phased in.
Asked if they overall support or oppose the changes, 70 per cent told the Modus Research survey they were supportive or neutral. And 64 per cent also said the changes would have a neutral or positive impact on their own company over the next five to 10 years.
The survey was conducted between June 27 and July 6 after the plan was announced. Executives from Quebec were not surveyed because the province has a separate Quebec Pension Plan. Mr. Graves said support varied depending on company size, but a majority of executives were still supportive at all size levels.
For example, 81 per cent of executives at companies with 100 or more employees said they supported the changes, while just 53 per cent supported the move at companies with 10 to 99 employees and 59 per cent were supportive at companies with fewer than 10 employees.
Executives at smaller companies were more likely to feel the change would have a negative impact on their own firm. Only 21 per cent of executives at companies with over 100 employees felt the changes would be negative for their company over the next decade, compared to 46 per cent at companies with 10 to 99 employees and 31 per cent with fewer than 10 employees.
Mr. Graves said he was not surprised to find that some executives were still supportive of the expansion even when they said it would have a negative effect on their firms. Many Canadians believe the CPP is a valuable pension guarantee for workers, he argues, including a majority of higher-paid Canadians who don’t need to personally rely on the CPP for their own retirement.
“They’re not necessarily speaking as business people when they say that,” he said. “They’re speaking as citizens of Canada.”
A broad-based Forum Research survey of 1,429 Canadians, released last week, found 68 per cent of Canadians supported the expansion plan, while only 16 per cent disapproved and 17 per cent were not sure.
The Canadian Federation of Independent Business also released its own survey results last week, showing far lower support for CPP expansion among its business members. The CFIB survey found 62 per cent of its members do not support expansion while 21 per cent are supportive and 17 did not know. It also found that 69 per cent of respondents said the plan would increase pressure on their companies to freeze or cut salaries.
Mr. Graves said the CFIB survey may show more negative sentiment because the organization has been a vocal opponent of the plan in recent years, so its members have heard more criticism about CPP expansion than the public generally.
The Modus survey found support among business executives was lowest in Alberta, with just 49 per cent of executives saying they supported the enhancement, while Ontario had the highest support level at 64 per cent.
Mr. Graves said one reason for higher support in Ontario could be relief that the province will not introduce its own pension plan now that there is a CPP deal. The proposed Ontario Retirement Pension Plan was expected to be even more costly for business and cover workers to a higher income level.
The survey’s finer details showed broadly neutral sentiments.
Executives were asked to rank their level of support on a seven-point scale, and Mr. Graves said most of those ranked as opposed to expansion were only weakly negative, with only 3 per cent saying they were extremely opposed. Similarly, a vast majority of supporters were also at the weaker end of the support range.
“Most of the points were near neutral,” he said.