I was talking about the maximum allowable earnings. This affects those who earn about $25,000 and will be entitled to the tax credit. Someone who earns less than $25,000 cannot really pay a retirement premium. However the bill provides for a tax credit that offsets the contribution. Would a less awkward mechanism not have been better, as well as a zero-level contribution?
Our concern is that at a certain point, the tax credit may disappear. Over the years, will the tax credit always match the contribution? There is no mechanism that will connect these two things over time. Would an employee contribution equal to zero not have been preferable to a mechanism that means that people have to contribute first and recover it later through a tax credit?
It might have been preferable to include a mechanism in the Canada Pension Plan allowing these people not to make a contribution, without having to resort to tax credits. However, with regard to the overall impact, we are entirely in agreement with the result for those with low incomes.