C.D. Howe article argues tax credit could expand workplace retirement plan coverage
April 10, 2026
A new article published by the C.D. Howe Institute (the “Institute”) argues that a targeted federal tax credit could help expand access to workplace retirement plans, particularly among small and mid-sized employers.
According to the article, fewer than 19% of Canadian employers between 5 and 499 employees provide a workplace retirement plan. The Institute estimates that more than nine million Canadian employees do not have access to a workplace retirement plan, largely because smaller employers are less likely to offer one, leaving many workers less prepared for retirement as individual savings are often inconsistent and subject to higher costs than employer-based arrangements.
To address these gaps, the article proposes a Small Employer Retirement Plan Tax Credit that would subsidize plan set-up costs and employer contributions. The article estimates that, at a cost of $1 billion to $2 billion over five years, the credit could expand workplace retirement plan coverage by 125,000 to 500,000 workers.
The proposed credit would apply to a range of workplace retirement arrangements, including registered pension plans, group RRSPs and deferred profit-sharing plans.
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