written by Brent Soucie, Consultant, CPA, CA
July 22, 2016
The Canadian federal, provincial, and territorial finance ministers have recently announced some noteworthy changes to the Canada Pension Plan (CPP). In short, we are all going to have to pay more into the plan; however, we should all get more out of it when we retire.
First and foremost, it’s important to understand that the CPP prescribes a notional, yet specific, level of income on which it bases all of its calculations. This prescribed amount is called the Maximum Annual Pensionable Earnings (MAPE). The MAPE is prescribed on an annual basis, and tends to grow with inflation. In 2016, it is equal $54,900. As I mentioned above, this amount is strictly notional. In other words, the amount of CPP one can collect will never equal the MAPE because the figure is simply used for calculation purposes.Read more »