Hundreds of thousands of jobs in Alberta "could be in jeopardy" if the federal government goes ahead with proposed enhancements to the Canada Pension Plan, says a group representing small businesses.

In December, the federal government agreed to slow down on changes to the CPP due to the sluggish economy. But last week, federal Finance Minister Bill Morneau said his government hopes to introduce the enhancement to the CPP before the end of the year.

Dan Kelly, the president of the Canadian Federation of Independent Business, said many small and medium-sized businesses in Alberta would not be able to afford the added costs.

"Right now, small firms are certainly not knocking the lights out from an economic perspective right now," said Kelly.

About one-third of Alberta small and medium businesses are looking to lay off staff in the next three months, according to the CFIB's business barometer.

Dan Kelly, president of the Canadian Federation of Independent Business, says the CPP enhancements could mean hundreds of thousands of jobs could be in jeopardy. (CFIB)

"And yet the government is actively considering a proposal to expand Canada's largest payroll tax," Kelly said. "This would come not at a great time in the economic cycle of the country at all and certainly in this province, with really bad job prospects in many circles ... this would just make it an awful lot worse."

Kelly said that one-third of business owners said they would have to turn to layoffs in order to accommodate the added costs.

"That could be hundreds of thousands of jobs in jeopardy," he said.

Pension alternatives

"We don't like the idea of a CPP expansion, full-stop, at CFIB," said Kelly, who is slated to meet with Alberta Finance Minister Joe Ceci today.

He opposes the idea of those who are already saving enough for their retirement having to pony up more money for the CPP. Kelly said the CFIB prefers the idea of the Pooled Registered Pension Plan, or PRPP.

"It's a voluntary vehicle," he said. "There's a few regulatory steps that Alberta needs to go through to complete the process, but we'd like the government to at least allow that to take hold, before considering any additional measures to address pension income in Canada."

Otherwise, the CPP enhancement would have a "devastating" impact on Alberta small businesses, Kelly said.

"There's a lot of business owners that are doing absolutely everything they can to hang on to their staff," he said.