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In addition, pension expert Malcolm Hamilton raised concerns in 2015 about how the household savings rate was being calculated since it ignored demographics. He concluded that contrary to popular opinion, the savings rate for pensions and RRSPs as a share of employment income almost doubled from 7.7 per cent in 1990 to 14.1 per cent in 2012.

Moreover, many expansion proponents assume that an expanded CPP will result in a net increase in savings for retirement. Both theory and empirical evidence indicate this is not the case. Instead, higher mandatory CPP contributions will likely result in less private savings in pensions and RRSPs. A 2015 study found that between 1996 and 2004, when CPP contributions were raised from 5.6 to 9.9 per cent, for every $1 increase in CPP premiums, the average Canadian household reduced its private savings by almost $1 because people have a preference for how they split their income between saving and consuming. Mandating an expanded CPP doesn’t change that preference. Thus the overall rate of savings will likely remain unchanged but the mix will change to favour more CPP and less private savings.

It’s also worth noting that the CPP doesn’t provide inheritance to dependents comparable to the way private savings can be passed onto loved ones, and unlike RRSPs, CPP doesn’t provide the flexibility to draw on contributions for a down-payment on a home or financing to go back to school.