Most employed Canadians and small business owners cannot afford to save more for their retirement, according to a recent survey conducted for the Toronto-based Canadian Federation of Independent Business.
The survey found that 58% of Canadian employees cannot afford to save more for retirement. When respondents were asked to choose the best ways for government to help Canadians increase their retirement savings, the most popular response is “control government spending and reduce taxes to allow Canadians to contribute more towards retirement savings” with 39% choosing this option. Almost as many people, 37%, say there should be new incentives for people to save such as government providing a one-time match to contributions made to tax-free savings accounts (TFSA) or registered retirement savings plans (RRSP).
Only 18% choose a mandatory increase in contributions to the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP), although 33% also admit it would help them save more than originally planned.
The same questions were put to small business owners with 66% saying the government should control its spending and reduce taxes and only 5% calling for a mandatory increase in employee and employer CPP or QPP contributions.
The survey also asked Canadian employees and small business owners for their thoughts on the effects of an immediate mandatory increase to government pension plans.
Approximately, one-third (34%) of employed Canadians surveyed say it would reduce their ability to spend on essential goods and services such as food or living expenses. However, the next popular answer comes from 33% of respondents who state it would help them save more for their retirement than originally planned. More than one-quarter, 27%, say it would reduce their ability to take advantage of other savings vehicles such as RRSPs and TFSAs.
A majority of small business owners surveyed, 67%, say that mandatory contributions to CPP or QPP would increase the pressure to freeze or cut salaries; 46% say it would reduce investments to their business and 35% believe it would decrease the number of people they can employ. Only 18% state it would help their employees or themselves save more for retirement than originally planned.
Ipsos-Reid conducted the poll for CFIB. Between June 29 and July 3, an online survey was conducted among a sample of 1,150 employed Canadian adults aged 18+ from Ipsos’ Canadian online panel. In addition, Ipsos-Reid surveyed 7,889 small business owners for their thoughts between June 26 and July 6.