Madam Speaker, as you know, a stronger Canada pension plan was a key part of the promise Liberals made to Canadians when we pledged to help the middle class and those working hard to join it. Then, in June, the Minister of Finance reached a historic agreement in principle with the provinces to enhance the Canada pension plan. It is an example of the results that can be achieved when the federal government has provincial partners. The legislation before the House is the next step toward implementing the commitment to enhance the CPP.
Why should we enhance the CPP? It is because achieving a safe, secure, and dignified retirement is, without a doubt, among the most significant goals for hard-working Canadians. We know that middle-class Canadians are working harder than ever and that many are worried they will not have enough to set aside for retirement. That feeling is palpable. When we knock on doors and hold town halls to talk to people and discuss the work of government, we find their concerns to be very well founded. Extensive analysis conducted by the finance department and provincial governments has found that around one-quarter of families nearing retirement, some 1.1 million families, face a drop in their standard of living when they retire. The middle class deserves better.
This conclusion led us to work toward our agreed enhancement to the CPP with the provinces. What are the benefits? First, there will be more money in the CPP waiting for Canadians when they retire. Once fully in place, the CPP enhancement would increase the maximum CPP retirement benefit by about 50%. The current maximum benefit is $13,110. In today's dollar terms, the enhanced CPP would represent an increase of nearly $7,000, to a maximum benefit of nearly $20,000. The Department of Finance has estimated that by strengthening the CPP, we would reduce by about a quarter the share of families at risk of not having adequate retirement savings.
We on this side of the House are proud to be able to take this bold action to support middle-class Canadians by strengthening their retirement incomes. Without a doubt, a stronger CPP would be good for the middle class and those working hard to join it, and good for the Canadian economy overall. For most Canadians, these increased benefits would come from just a 1% increase in their contribution rates. We are also making sure to give individuals and their employers plenty of time to adjust to the modest increases, making sure these are small and gradual, starting in 2019.
Today's legislation, as agreed with the provinces, would ensure that low-income Canadians would not be financially burdened as a result of their extra contributions. It would do this by enhancing the working income tax benefit to roughly offset the incremental CPP contributions, leaving eligible low-income Canadians with little to no change in disposable income while still securing them with a higher retirement income.
The enhanced CPP would simply build on the core existing CPP benefits and do so in a smart, carefully targeted, and effective way that reflects the extensive research that governments brought to the table in crafting this enhancement for the benefit of all working Canadians. Taken together, it is a comprehensive package that would increase CPP benefits while striking an appropriate balance between short-term economic considerations and long-term gains.
It is for these reasons that I call on all members of the House to support this legislation, support Canadians, and ensure that all Canadians have a safe, secure retirement.