Canada Pension Plan or CPP

Understanding Canada Pension Plan or CPP

First Published Date: July 2, 2010

One of the most important things in your retirement, if you live in Canada, is your Canada Pension Plan. This is what will provide you with much needed money to go with your savings after you have retired, but there are some important things to know about it. Many assume that the payments just happen, regardless of when they take their retirement, but there is much more to the Canada Pension Plan than that.

First of all, your Canada Pension Plan is a monthly benefit that is paid to you, when you have contributed to it through your working life. It is designed to provide you with one-quarter of the earnings you have received, to a maximum amount and as of 2010 that amount is $934.17.

In order to qualify for the Canada Pension Plan, you need to have made at least one valid payment through work, usually based on at least one year’s of work. You also need to be at least 65 years old, unless you meet the earnings and contributions requirements and then you can start receiving it between the ages of 60 and 64. If you decide to take your pension between the age of 60 and 64, then your pension payment will be reduced by .5 percent for each month before you turn 65. The maximum your payment can be reduced is 30 percent though.

One thing many people do not realize is that the pension plan does not kick in automatically at the age of 65; you need to apply for it. That being said, if you are receiving a CPP disability benefit, then that will automatically change over to the Canada Pension Plan payments when you turn 65.

If you do not start your pension plan until you are past the age of 65, you actually increase how much you get and many people do not realize that is the case. If you are between the age of 66 and 70 and you start your payments, you will get .5 percent more each month after the age of 65, and before the age of 70, to a maximum amount of 30 percent. If you start your pension after the age of 70, you receive the same pension amount you would have at the age of 70.

Sometimes people change their minds after they start the pension and decide to cancel it. Under the law, you are allowed to do this up to six months after the pension starts. You need to request a cancellation in writing and, most importantly, you have to pay back all the benefits you received to that point. In addition, you must pay any CPP contributions that you would have during that period of time you collected a pension.

These are just some of the important things to know when you are dealing with a Canada Pension Plan. Knowing these can ensure you get the most out of your pension when you do decide to take it.

Positive Changes In Canadian Economy

Positive Changes In The Current Canadian Economic and Financial Situation

First Published Date: Feb 11, 2010

The Canadian financial events and news is based upon the analysis of a positive change in the current economic and financial situation in Canada. The seventh largest world economy and it is abundant with material wealth and a high-tech industrial society that belongs to the trillion -dollar class. The Canadian financial state and economy is based upon the foreign trade which is for about 2.7 percent of the Gross Domestic Product (GDP). Canada experienced its sixteenth consecutive year with solid domestic growth product, which is dependant largely upon the natural resources, skilled labour force and modern capital industries. The prudent fiscal management has produced consecutive balanced budgets from 1997 till now. 

The global recession caused slackness in the labour market and also has cost Canada some 400,000 jobs. The plunge in the stock market temporarily compounded the thriving community to delay their retirement plans. But the unemployment rate growth and the number of workers available for skilled trades and some occupation dropped. The recession has only provided a temporary stay from the tense labour market of 2007 and 2008 although; the executive action briefing has provided with a statement the labour supply is now plentiful in many industries. The present and forthcoming skill shortages are embedded with the immigration policy and practice, as well as for the use of contract and fleeting workers. In this widespread scarcity, the progressional plans hold the paramount importance throughout the organizations. The strong employment rate remains the same with 380,000 new jobs and the unemployment rate has continued to stay at an average rate of 6.0% this year which is a record low rate.

Canada is in the list of G7 countries, in surplus from 2007 to 2009 as the expectations of the OECD remains. The international trade performances remains stable during the past challenging economic recession. An almost 60% increase in the value of dollar had been observed as compared to the US dollar since 2002. The Canadian dollar is expected to be just average under US $0.96 in 2010. As for a comparison in the past few years, the United States economy as compared to Canadian financial state and economy weakened and the demand of importing Canadian goods has been affected. The export of goods and services increased by 1.9 % in 2007 when it reached by $533 billion dollars and this has improved the Canadian financial state and economy. And the imports also went by an increase of 3.2 % to $503 billion dollars to support the Canadian financial state and economy.

If the Canadian financial experts and economists bring down the rates of finances, the consumer confidence will be raised higher, it shall encourage the consumer to loosen the strings around his purse. It has been speculated that the Bank of Canada may refrain from pushing up high interest rates until mid-year. The all items consumer price index is also moving from deflation to inflation since the retail gasoline prices have been rebounded. As it has been predicted that there will be an over all global recovery of the economic recession the second of 2010, downsizing and capitalization will improve. Over the past three years, the budget surpluses have allowed the government to begin pay down of the national debt of Canada. This also has given the chance to spend more on federal programs and reduce taxes, to the government. The national debt have come to the reduced figure of 19 billion Canadian dollars.

Is Your Job More Secure, Or Less?

Canadians Feel They Have More Job Security Than Before

First Published Date: Sep 9, 2009

Nearly half of Canada’s current workforce feels more secure in their roles than they did one year ago, according to findings released this week. Although this does not technically constitute a majority, the numbers are in favour of the proposition that Canadians feel they have more job security than before, with 38 percent feeling that they were less secure compared to 46% who feel more secure. It is a sign that people are still divided on the subject of the economy and employment, but that optimism is continuing to creep upward in the light of positive noises at home and abroad. As we wait to see how the recovery continues, it would be chutzpah to suggest that the findings of the recent Harris-Decima poll proved that we were out of the woods, but good news is good news.

The positive feeling is more pronounced among people working in the public sector, of whom 53% said they felt more secure in their employment compared to 42% who felt more secure in the private sector. This is natural, as the companies which are going bankrupt and the plants and offices which are being closed down tend to be private sector entities. With a national unemployment rate of 8.6% expected to rise in the weeks to come, private sector workers still nurse understandable doubts that their jobs are safe. However, the prevailing opinion is that most companies with substantive cuts to make have already made the bulk of those cuts and have now downsized to a reasonable level.

Of the 1,009 people surveyed, some 33% said that they felt job security was the top perk in a job – nearly exactly a third of the group. Almost as many (31%) said that work/life balance was the most important thing in any job. Taking these two groups together it could be said that almost two-thirds of the Canadians surveyed felt that comfort and confidence played a big part in their reasons for doing their job. With 15% citing a secure pension and 12% a generous salary, those feeling that remuneration was the important part of a job was just over a quarter. Whether everyone responding was being entirely honest with the researcher and themselves is a question for another day, however it would appear that a sense of uncertainty in the last couple of years has caused people to reassess priorities.

Other interesting results to emerge from the survey had much to do with the divisions between public and private sector workers. When asked whether government workers were overpaid, 64% of the private sector said they were while only 39% of public sector workers agreed. The reasons for this strength of feeling among the private sector may well be that they resent their taxes being spent on workers who they very much (83%) feel do an excessive amount of “paper pushing”. 72% of public sector workers agreed that their jobs involved a lot of administrative work, but did not feel in such great numbers that it should mean they have to take a pay cut.

Canada: The Genuine Alternative To America

Canada Welcomes the World

First Published Date: Sep 25, 2009

There has always been a feeling in this world that the near neighbours of the larger or more prominent and influential countries in the world suffer from something of an inferiority complex when placed against their neighbour. As New Zealand is to Australia, as Scotland is to England, there is a feeling that Canada is the poor relation to the United States of America. This feeling comes from nothing more than a cheap, basic reading of the geography and the media profiles of the countries, and is typically quite wide of the mark, but it is still prominent in the way that people talk about the “junior” neighbour. So it should be embraced and celebrated when it is made clear, in any way, that the so-called “little guy” scores a notable success.

For instance, in July the number of people traveling North to Canada from the USA increased by nearly five per cent. There is an increasing feeling that Canada is far from being the “poor relation” here, but rather the more grown-up, sensible alternative to the admittedly attractive superpower with which it shares a border. Since the global financial crisis really dug its claws in (and the vagaries of global trade are such that when it got to one major country its neighbours and trade partners would be affected too), there have been experts in Canada and outside falling over themselves to credit Canada with being uniquely well-positioned to deal with a recession.

Part of Canada’s problem, if it really has one to be concerned with, is that “sensible” is seen as being an unsexy word. There is something of a problem in this world with “dumbing down”, and a country which can claim to be sensible – a highly desirable quality to have, surely – will raise fewer eyebrows than one which can come out, all guns blazing, and promise to really put on a show you will never forget. However, there is now a sense that we are tiring of dumbing down, and that this world has more to offer than the typical and well-worn attractions of the “bigger” neighbours. It is not just Americans who are pouring into Canada. The increase in visitors from Japan in July was a huge 32.4% – and visitors from all over the world increased too.

What this means for Canada is something essentially quite simple. Where there is tourism, there are dollars. As Canada boosts its visitor numbers, it will increase its income from holidaying families and also increase the demand for jobs in its travel sector. This is something that will increase further in the New Year as Vancouver plays host to the Winter Olympics, bringing visitors to Canadian shores in yet greater numbers and showcasing a country that has plenty to be proud of in terms of natural beauty, ease of visiting and a thriving hospitality sector. When Canada welcomes the world, what the world sees is not simply a country which is sensible, but the country that many others would like to be.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Sep 25, 2009.

Canadian Consumer Confidence Up Again

Consumer Confidence Is Important

First Published Date: Oct 8, 2009

For the seventh month in a row – almost unheard of in a global downturn – the consumer confidence felt by surveyed Canadians is on the increase. This was the finding of the latest monthly survey from the Conference Board of Canada, which found that, based on a fairly complicated index of statistics and consumer response, the confidence of Canadians with regard to potential future jobs and larger-scale purchases has rises by two and a half percentage points to break the 90% mark (at a total of 90.9%). Meanwhile, south of the border in the United States, the level of consumer confidence sits at 53.1%. This is due in no small part to the deeper nature of the recession in the States – an economy which is showing recovery, but later and slower than that in place in Canada.

Of course, although these statistics sound great for Canadians and less so for the American public, there is a reason that they are not trumpeted as broadly as harder financial figures. The clue is in the wording of the results and indeed the questions asked. “Confidence” and “sentiment” are hard things to measure exactly. The indices used are based on a lot of different data, and prone to be skewed by false confidence or misguided bullishness depending on the prevailing public opinion of the time. Another survey entirely, carries out by the University of Michigan in collaboration with Reuters, puts the US numbers up at 73.5, on a rise and therefore going in a completely different direction from those of the US Conference Board. Which is right? Possibly both, possibly neither, it depends on the questions asked among many other variables.

However, this is not to say that consumer confidence is unimportant. It most certainly is not, in fact there is a great deal to be said for having a consumer force out there who are confident of earning and ready to spend some money. This in itself helps drive recoveries, and if belief can be spread at such a crucial time it is not something that we should be cynical about. Of course, we’re talking about finance here, so there is going to be cynicism – indeed, if you could bottle a sneer and sell it, the entire global economy could be expanding by multiple percentage points tomorrow – but the knowledge that people are ready to start making purchases again is certainly something to be pleased about.

The pattern of skepticism in our world is something that makes it difficult to read anything into any package of figures released – and more so when the figures contradict each other so frequently. It would be interesting to fast forward into 2011 and see if people are still as dubious about the recovery and how it will hold then. Perhaps this tougher crust will at least enable us to see the warning signs ignored by so many when they were being waved frenetically a few years ago. If not, then this crisis has taught us nothing. What we seem to be seeing in the latest figures is encouraging in that respect – a guarded optimism that takes nothing for granted.