Thank you very much.
We're pleased to be here on behalf of our 108,000 small and medium-sized business members to support this piece of legislation. We think it's a very important tool, one that will respond well to many of the needs of small and medium-sized firms across Canada.
It is our sector of the economy, the small businesses, that is the primary target for PRPPs in Canada. Quite frankly, the success or failure of this tool depends on how small and medium-sized businesses perceive it and take it up. I should mention that today the CFIB was meeting with different suppliers about offering this to our 108,000 members across Canada as an option for our members, who have currently very few retirement savings options for themselves and their employees.
Just as a reminder, there are 2.3 million businesses in Canada. Half of those are self-employed; they're businesses of one. Some 98% of the businesses in Canada have fewer than 50 employees. It is this target that this tool is designed for, and we hope it will meet their needs. In any discussions of pensions, one of the things we've flagged over the last number of weeks is to ensure that the gap between public-sector and private-sector retirement savings options is equalized.
It's something that is of great concern to small and medium-sized firms right now, with unfunded liabilities in the billions. We note that the self-employed retire on average at 66, whereas those in the public sector retire on average at 60. Private-sector workers fall somewhere in between.
Why do small firms not offer pensions now? Why do Canadians struggle today to use the retirement savings options now on the market? The biggest issue is affordability. They struggle to find the dough to put into these retirement savings tools that exist today. The PRPP, on the surface, is not necessarily going to change that. It is how small businesses react to this and some of the measures you're putting in place that will make or break this tool.
Some 80% of our members—small businesses—offer nothing. They offer their employees no retirement savings options. They have no company retirement savings plan for themselves. This is the biggest hurdle for the PRPP or for any other retirement savings option that exists today. It is this group that we most need to focus on. It is only at about 50 or more employees that the majority of firms offer some form of retirement savings plan for their employees.
Why is this the case? The number one reason is that they find it too expensive. They don't have the money to put into retirement savings plans. That is true, whether it is a PRPP or a CPP increase. That is the biggest struggle we have: small businesses are not sitting on basements full of cash that they're just too cheap to unlock. This is the issue we need to address.
The other important reason is that some of the tools are complicated for small business owners, and the administrative costs are significant. How do small businesses save on their own? One, they use the value of their own business; the $750,000 capital-gains exemption is very important to them. We note, with interest, that back in the 2008 election the government committed to increase that and index it to inflation. This has not happened.
We also need to look at RRSPs. That is a tool that many small business owners use. Our members are opposed to a CPP premium increase; we view that as an employee deferring income for a business owner. That's just a payroll tax hike. We think it would lead to a potential loss of 1.2 million person-years of employment.
In summary, we think that the PRPPs are an important measure for allowing small business to access proper pensions. We think that the regulations are very important, particularly for many firms that have a lot of part-time workers and have difficulties with turnover.
I'd be happy to answer any questions.