One of the solutions to partially solving Quebec’s thorny problem of labor shortages lies in the hands of the elderly.
And that’s why Prime Minister François Legault has set himself the goal of “convincing people aged 65 and over to either return to work or stay”.
In addition to the measures already in place to encourage older people to remain active in the labor market, Mr Legault, during his opening speech at the new parliamentary session, hinted that his government will give workers aged 65 and over the freedom to decide whether they whether or not you want to continue contributing to the Quebec Pension Plan (QPP).
Currently, all workers earning more than $3,500, whether age 18, 65, 75 or older, are required to contribute to the QPP. And this regardless of whether people over the age of 65 draw their old-age pension and their QPP pension.
Legault’s commitment
Word of François Legault: “Our finance minister has already taken action, then he will make voluntary contributions to the QPP. So I think it’s going to be another way to attract people over 65. »
My pinky tells me that this new measure will be officially announced next Thursday when Finance Minister Eric Girard presents “Update on the economic and financial situation of Quebec”.
If so, it should come into force as early as next month, i.e. January 2023.
The economy?
Specifically, you should know that from January the contribution to the QPP will increase to 12.8% of the contributory income, with this contribution being divided equally between the employee and the employer. Except for the self-employed, who have to pay the full contribution themselves.
In 2023, the maximum QPP contribution is $8,076.80. This equates to a payout of $4038.40 for the employee and $4038.40 for the employer. Or the total amount for self-employed.
In exchange for this contribution to the QPP, workers aged 65 and over are entitled to an increased pension.
However…
Forcing those over 65 to keep paying QPP contributions if they keep working has always been seen as a kind of pitfall by seniors. Of its kind, the tax cut that will make the vase overflow!
By making QPP contributions optional from age 65, the Legault government believes this will be enough to encourage many over-65s to continue working or to return to the labor market.
The latter will have the impression of benefiting from a gift by not paying QPP contributions.
Employers will appreciate it
It is clear that this new measure is also suitable for employers, since they do not have to pay their share to the QPP if the employee over 65 decides to stop contributing.
Ideally, the employer agrees to pay the employee an amount of money equal to the QPP contribution they save on the backs of employees aged 65 and over!
The basin
According to Statistics Canada’s employment data for the month of November, there are currently 208,800 Quebec workers aged 65 and over employed in the labor market.
With 122,500 workers aged 65 to 69, they make up almost 21.9% of people in their age group who remain active in the labor market.
This is significantly lower for Ontarians aged 65-69 who are still employed, their employment rate rising to 28.7%, or 6.8 percentage points higher than in Quebec.
For their part, the 86,400 Quebec workers aged 70 and over represent only a fraction of 7.2% of their age group, compared to 7.6% for Ontario residents.
If Quebec can raise its employment rate to Ontario’s level, Quebec could hire 42,200 more workers among the over-65s.
By making contributions to the QPP optional, there’s no doubt that Ontario’s catch-up will have a chance.
