CPP, RRSP changes come into effect Jan. 1

While the COVID-19 pandemic will continue to create uncertainty in 2021, Canadians can be sure of one thing: paying taxes.

Among the changes for this year, Canada Pension Plan premiums are increasing effective today as part of a multi-year plan approved by provinces and the federal government four years ago.

The aim of the increase is to boost retirement benefits through the public plan by increasing contributions over time.

Canadians planning for retirement can also set aside about $500 more in their registered retirement savings plans, according to the Canada Revenue Agency.

And while employment insurance premiums aren’t increasing, maximum insurable earnings used to calculate benefits are rising, resulting in a potential increase in premiums of just over 33 dollars, depending on your income.

Carbon taxes will increase in the provinces that have not achieved the federal government’s climate action targets, resulting in higher prices for heating fuels and gasoline.

But Ottawa says most households in those provinces will receive more than they pay as a result of the federal carbon pollution pricing system.