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Canada Pension Plan enhancement

As you may know, changes to the Canada Pension Plan (CPP) will be implemented starting in 2019. The changes will affect everyone who works in 2019 and contributes to the CPP.

Here are some of the key highlights:

  • The changes aim to strengthen the CPP for future generations and provide better retirement security for all Canadians.

  • CPP contributions will increase so that contributors receive higher benefits.

  • The enhancement will be phased in gradually over a seven-year time frame.

  • The income replacement rate will increase from 25% to 33.33% of the Year’s Maximum Pensionable Earnings (YMPE). The YMPE will also gradually increase by 14% by 2025.

  • Currently, employees contribute 4.95% on these earnings to the CPP. From 2019 to 2023, the contribution rate for employees will gradually increase to reach 5.95% in 2023.

  • Those who earn more will contribute more towards future CPP benefits.

  • People who work in Québec and contribute to the Québec Pension Plan (QPP) won’t be affected by the CPP changes but will benefit from QPP enhancements that are also being implemented.


For more information

Employers can learn more about CPP enhancement contributions at the Canada Revenue Agency website.  For full archived information go to Department of Finance

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