OTTAWA - The federal government estimates it will cost taxpayers $250 million per year to offset the additional financial burden that expansion of the Canada Pension Plan will eventually place on low-income earners.
Ottawa and the provinces reached an agreement-in-principle this week to gradually increase CPP premiums as a way to boost the program's benefits for future generations of retirees.
The announcement also included a federal commitment to enhance its refundable "Working Income Tax Benefit" to help compensate eligible low-wage earners for the higher CPP contributions.
The Finance Department projects that change will cost about $250 million annually once the CPP premium increase has been fully phased in.
The federal government also says it will allow the provinces to make specific changes to the tax benefit so it's more harmonized with their own programs.
Due to this, Ottawa says it will continue working with the provinces and territories before implementing the adjustments to the tax benefit.
