CFIB: Unfair federal government pensions detract from small business retirement savings

Toronto, May 18, 2010 – As a part of their submission to the federal government’s consultations on the retirement income system, the Canadian Federation of Independent Business (CFIB) has highlighted the inequities between public sector plans and those in the private sector. Securing the Future is based on the responses of 7,872 small- and medium-sized business owners regarding their views on how to tackle Canada’s retirement income issues in a way that is sustainable for all Canadians.

According to CFIB’s report, 79 per cent of respondents indicated that they do not currently offer a retirement savings plan, such as RRSPs or a Registered Pension Plan. The main reason for not offering a plan is that they are too expensive. The second most common reason is that it is too complicated to administer. This suggests that, at a time when proposals for mandatory increases to payroll taxes such as CPP/QPP premiums and benefits are being put forth, many owners simply cannot afford such pension initiatives.

“The federal government uses tax-payer dollars to ever-so-generously outmatch its employees’ pension contributions. Hard-working lower and middle-class Canadians in the small business sector should not be subsidizing the generous retirements of public servants, most of whom do not even contribute anywhere near an equal share of their own retirement packages.” explained CFIB president, Catherine Swift.

Currently, those employed by the federal government only contribute 34 per cent of their total pension contributions. One of the solutions recommended in the report is the gradual increase of the federal public sector pension contribution rate to 50 per cent for employees, the ratio most commonly used at the provincial level. CFIB argues that this would not only act as a fairness measure, but it would also make the federal public sector pension system much more financially viable in the long term.

CFIB’s report also recommends a number of other measures, such as:

  • Requiring public sector pension plans to adhere to the same set of rules and disclosure requirements as do private sector plans
  • Phasing out early retirement incentives in the public sector
  • Not increasing mandatory CPP/QPP premiums
  • Offering incentives to boost coverage rather than mandating it

“Prior to the adoption of any other changes to the retirement income system, governments should make finding ways to re-establish a level playing field between the public and private sector a top priority. Once that has been achieved, addressing other issues will be much easier and fairer,” concluded Swift.

To view the report in full, please visit

About CFIB

CFIB has been a big voice for small business for over 35 years with 105,000 members nationwide in every sector. Taking our direction from CFIB Members, through regular surveys, we lobby for small- and medium-sized businesses at the federal, provincial and local levels of government. For more information, visit