One of the solutions to solve, in part, the thorny problem of labor shortage in Quebec lies in the hands of the elderly.
And that is why Prime Minister François Legault has set himself the objective of “convincing people aged 65 and over, either to return to work or to stay at work”.
- In addition to the measures already put in place to encourage the elderly to remain active in the labor market, Mr. Legault hinted, during his opening speech of the new parliamentary session, that his government will grant workers aged 65 years and over the freedom to choose whether or not to continue contributing to the Quebec Pension Plan (QPP).
Currently, all workers who earn more than $3,500, whether they are 18, 65, 75 or older, are required to contribute to the QPP. And this, regardless of whether those aged 65 and over withdraw their old-age pension and their QPP pensions.
Legault’s commitment
Word of François Legault: “Our Minister of Finance has already taken measures, then there, he will make contributions to the QPP optional. So I think it’s going to be another way to attract people 65 and over. »
My little finger tells me that this new measure will be officially announced next Thursday when the Minister of Finance Eric Girard will present “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?
Concretely, know that the contribution to the QPP will rise from January to 12.8% of contributory earnings, which contribution is shared half and half between the employee and the employer. Except for the self-employed, who themselves must pay the full contribution.
In 2023, the maximum QPP contribution will be $8,076.80. This represents a disbursement of $4038.40 for the employee and $4038.40 for the employer. Or the total amount for the self-employed.
In return for this contribution to the QPP, workers aged 65 and over are entitled to an enhanced pension.
Whatever…
Forcing those 65 and over to still pay QPP contributions if they continue to work…has always been seen by seniors as a sort of pitfall. Of its kind, the tax drop that makes the vase overflow!
By making QPP contributions optional from age 65 and over, the Legault government believes that this will be enough to encourage many aged 65 and over to continue working or 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 is obvious that this new measure will also suit employers since they will not have to pay their share to the QPP if the employee aged 65 and over decides to no longer contribute.
Ideally, the employer should agree to pay the employee an amount of money equivalent to said QPP contribution that he will save on the backs of employees aged 65 and over!
The Pelvis
Currently, according to employment data reported by Statistics Canada for the month of November, there are 208,800 Quebec workers aged 65 and over who are employed in the labor market.
Numbering 122,500, workers aged 65 to 69 represent barely 21.9% of people in their age group who remain active in the labor market.
This is significantly lower for Ontarians aged 65 to 69 still active at work, 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 a rate of 7.6% for Ontarians.
If Quebec managed to raise its employment rate to Ontario’s level, that would allow Quebec to recruit 42,200 more employees among those aged 65 and over.
By making contributions to the QPP optional, there is no doubt that this catch-up on Ontario will have a chance of materializing.
