Local Business
Brainstorming Changes to the Canada Pension Plan
Currently, employees have to pay roughly 5% of their income up to around $50,000 to the Canada Pension Plan. Their employers must match this amount. In simple terms, this is up to $2,500 per year, per employee, for both the employee and employer.
There are changes beginning in 2019 to gradually raise this amount to around 6% from around 5% while indexing the maximum pensionable amount. By 2024, the amount you pay CPP on is estimated to be over $66,000, and the rate around 6%. This is around $4,000 paid by the employee and around $4,000 paid by the employer.
There is then going to be an additional amount of another 4% for people earning more than this amount on the next $10,000 of earnings… ($400 per person)… but let’s just focus on the under $66,000 crowd for now.
The current system forces the employer and employee to contribute to a plan that they have no control over, and the government decides the rules, the investments, and the amount you get back when you can collect. If you die, your spouse may get a spousal benefit, but if you both pass away, there is nothing left behind to the next generation, siblings, charity, etc.
So let’s brainstorm.
What if, instead of a 5%… soon to be 6%… mandatory CPP contribution by employees and employers, we made it a mandatory 6% from both sides to an individual employee Locked-in Retirement Account or LIRA that the employee-owned (not the government nor the employer).
Now I’m not referring to the current technical definition of a LIRA necessarily, as I’m not an expert on retirement investment products. However, I am referring to the possibility of keeping your pension for your family, secured for later use, rather than letting the government dictate and take it from your family after death.
This “LIRA” could have the same characteristics of the CPP in that you can’t touch it until 60… and you must take it out or convert to a Registered Retirement Income Fund (RRIF) by 71. This will provide more control over the individual receiving the amount while locking it in for retirement.
It would also allow for the money to be transferred to a spouse, children, estate, or make a legacy donation upon death, rather than get eaten up by bureaucracy.
Many small business owners can’t afford to pay more benefits than what the government is already mandating, and that’s fine. I’m not saying increase or decrease the amount. I’m saying change the beneficiary.
As an employer myself, I want to provide for MY employees and their families. Why should their loved ones suffer financially because of a premature death of the parents? The money the parents paid into the CPP all their life is now being used to fund someone else’s retirement.
The CPP rewards longevity.
You would be better off to hook yourself up to a machine in perpetuity just to keep you alive and the cheques coming into your bank account for your descendants, than to die of natural causes.
However, families that need the money the most, need it usually because of a result of a premature death of the main income earner. If your children are adults and out of school, then there is nothing left behind other than a nominal maximum “death benefit” of up to $2,500 which we all know won’t even be enough to cover the funeral costs, probate fees, and legal costs.
With this idea, the cost is still the same for the employer and employee just like the CPP. The key difference is that in the event of death, the remaining amount can be transferred to whomever the employee designated as the beneficiary, rather than losing it all to the government. This plan would preserve the legacy of the individual that passed.
Do you like this idea? Or not?
So tell me what you think. Is it time we thought outside the pine box casket?
Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html
The Downtown Business Association (DBA) Board of Directors has made the decision to wind down the Association’s operations at the end of 2025.
The Board determined that the Association is no longer able to operate sustainably under the financial framework available for 2026. After exploring all reasonable alternatives, the Board concluded that it could not continue without reducing services to a level that would no longer provide meaningful value to levy-paying businesses.
The DBA does not receive any operating funding from City Hall in a regular year, all funds raised are through Business Improvement Area Levy that consists of a mandatory levy placed on all businesses operating within the Business Improvement Area. These funds are legislated under the Municipal
Government Act, to be used to promote the Business Improvement Area, which is achieved through marketing and event initiatives along with providing advocacy support primarily to local government on behalf of the business community.
In recent years, the DBA has been a committed advocate for re-examining the approach to Downtown Governance. The Board has consistently maintained that the responsibility for funding downtown initiatives in such a socially charged environment should not rest solely with the business community.
Despite their efforts, the DBA recognized that the funds generated through the Business Improvement Area Levy were insufficient to effectively address the growing challenges of the current operating environment. This ongoing financial strain highlighted the need for a more equitable and sustainable
model to re-establish the downtown as a safe and welcoming heart of the city.
At the annual DBA budget presentation to City Hall, the DBA requested the essential funding needed to implement the Greater Downtown Governance Committee’s recommendations — work that the DBA is uniquely positioned to lead and has been delivering despite depleting resources for many years. The request was not approved. Instead, The City offered a one-time $100,000 Grant-in-Lieu, paired with a proposed 60% increase to the Business Improvement Area levy in 2026.
After careful analysis, the Board concluded that increasing the levy would place undue strain on already challenged businesses and compromise the DBA’s role as a trusted advocate. Operating with the reduced funding of $225,000 would require further staff reductions in an already under resourced environment and a significant reduction in programs, making it impossible to deliver the level of support that downtown businesses deserve and vitally need.
Beginning January 1, 2026, the City of Red Deer will become the primary contact point for matters previously supported by the DBA, including downtown support programs, business-district coordination, events, safety and cleanliness support, and stakeholder engagement. The DBA will work with City staff to support a smooth transition.
The DBA will continue to provide Clean Team services through the delivery of the City-funded environmental contract until February 1st, 2026.
Quote from CEO, Amanda Gould:
“To our business community, we have always operated with your best interests in our heart, continually driving the vision of a thriving downtown environment that serves every member of our community. The changes ahead will have a significant impact on downtown, as there will no longer be an organization dedicated to ensuring the downtown remains top-of-mind, leading events, marketing initiatives, or advocating on your behalf. It is likely you will experience less coordinated support and collective representation.
After 13 years of service to you and our beautiful downtown, it is with great personal sadness that we find ourselves here, but our message remains clear – addressing the unique challenges of our downtown should not rest solely on your shoulders. We cannot, in good faith, collect a levy that does not enable us to provide the essential services needed for our evolving downtown landscape”.
Quote from DBA Board Chair, Brandon Bouchard:
“The incredible staff at the Downtown Business Association have consistently delivered on their mandate with outstanding dedication and effectiveness. Through their efforts, they have successfully promoted the downtown area, organized impactful marketing and event initiatives, and provided steadfast
advocacy support for the business community. Their work has extended well beyond the legislated requirements, as they have proactively responded to the evolving needs of downtown businesses, adapting to challenges and supporting operations within a complex and changing environment.
Despite the staff’s relentless commitment to positioning the DBA as an effective leader for downtown interests, the absence of a sustainable funding model has made it impossible to continue delivering meaningful support. The Board cannot, in good conscience, propose a levy that does not enable the
Association to meet the required level of service, address the shifting priorities of the business community, or respond to the continually evolving needs of the downtown”.
From Community Futures Central Alberta
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