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28 June 2023  

The Honourable Carla Qualtrough 
Minister of Employment, Workforce Development and Disability Inclusion House of Commons 
Ottawa, Ontario, Canada K1A 0A6  

The Honourable Chrystia Freeland 
Deputy Prime Minister and Minister of Finance, Finance Canada 
90 Elgin, Ottawa, Ontario K1A 0G5  

Subject: Minimizing disincentives to work  

Dear Ministers,  

I am writing to express my support for the joint letter titled Minimizing Disincentives to Work, submitted by a group of national business organizations, including the Canadian Chamber of Commerce on April 20, 2023.  

As you are aware, a dearth of available labour is the top issue for businesses across the country – including here in Atlantic Canada. Labour shortages are affecting businesses’ ability to operate, and these shortages will persist for years to come as Canada’s aging population sees many more workers retire. An analysis of labour force survey data by the Canadian Centre for Policy Alternatives (CCPA) found that 73,000 more people retired in the year ending August 2022 compared to a year earlier – an increase of 32 per cent.  

For many sectors, the number of workers expected to leave the workforce in the next few years greatly outweighs the number of new entrants. Employers will need to re-engage seniors who have left the workforce as the next generation of workers will not be enough to fill the gaps of those leaving. Incentivizing older workers to participate in the labour force will be crucial to maintaining business productivity and our overall standard of living in Canada.  

In fact, a 2018 Report by Employment and Social Development Canada acknowledged that Canada’s participation rate of older individuals lags behind other countries. The report notes that older adults may struggle to stay in or re-enter the labour market due to a number of barriers, including “disincentives or lack of incentives to work in the retirement income system”.  

I support the following recommendations put forward:  

  1. Better communicating existing program provisions. We encourage the government to develop communications that clearly convey how earned income is treated and how older workers can access pension benefits (CPP, OAS, GIS, Allowances) and the Age Amount without having to stop working. We would be happy to work with your officials on what that communication could look like and we can support this communication to our networks and/or pass it on to our members who could share it with their older workers considering retirement.  
  1. Enhancing the Age credit amount. Rather than basing eligibility for the age credit amount on age and income, base it solely on age so that all seniors benefit equally and do not face any disincentives to work. Such a measure could be welcomed by doctors, nurses, pharmacists, engineers, therapists, professionals that work in skilled trades and many other higher-income service providers and employees with skills and experience that are very much needed. Alternatively, increase the amount available and/or reduce its phase-out rate, so that more could benefit from it, or introduce a similar credit specifically for older workers’ earned income. 
  1. Rebasing the CPP basic exemption amount. The basic exemption amount is now at $3,500 and has not changed since 1997. If it were pegged to 10% of yearly Maximum Pensionable Earning (YMPE), it would be $6,660 in 2023. CPP contributions would not need to be paid on the first $6,660. The base exemption could be rebased (increased), at least for post-retirement benefits. This would decrease the amount of income that is subject to the CPP contribution rate for all, regardless of the workers’ income level.  
  1. Making Employment Insurance (EI) premiums voluntary for those 65 years of age or older (like the CPP). Some older workers may prefer to keep more of their earned income rather than get EI benefits, particularly as EI benefits can result in a significant claw back of income tested benefits (e.g., GIS and Allowances). Conversely, some earned income can be exempt from the income test. Let older workers choose what is best for them based on their individual circumstances.  

According to projections developed by ESDC, there are 525,000 seniors available to participate in the labour force. Seniors have housing, experience, credentials, and do not have the need for childcare. This is a significant pool of potential workers, and seniors are currently under-represented in the Canadian labour market.  

Canadian business owners recognize the value that older workers bring. Not only do they have the institutional knowledge and experience to contribute to business success, they are also critical in the training and mentoring of new workers. For example, in the aviation and aerospace sector, one senior staff member is required for every two junior staff members when completing on the job training, including apprenticeships. Without older, more experienced workers, Canadian businesses will continue to face critical labour shortages and barriers to onboarding new workers in the future.  


Krista Ross 

CEO, Fredericton Chamber of Commerce 

Cc: Jenica Atwin, MP, Fredericton 

Cc: Nancy Healy, EI Commissioner for Employers 

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