Social Policy in Ontario

Ontario is right to push ahead with pension reform

Posted on August 12, 2015 in Social Security Debates

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TheStar.com – Opinion/Editorials – Ontario Premier Kathleen Wynne is right to push ahead with the new Ontario Retirement Pension Plan in the face of the Harper government’s refusal to improve the Canada Pension Plan.
Aug 11 2015.   Editorial

It’s bad enough that the Conservative government has rebuffed every call from the provinces to bolster Canadians’ retirement security by expanding the Canada Pension Plan. It’s much worse that it is actively trying to torpedo attempts by Ontario to set up its own pension plan to fill the widening gap in what many need for a decent retirement.

Ottawa doesn’t have to approve of Ontario’s efforts to strengthen retirement security for middle-income workers. It may even find the Wynne government’s plans objectionable. But to go out of its way to strangle the nascent Ontario Retirement Pension Plan (ORPP) in its cradle is a calculated slap in the face to the province.

No wonder the two governments have dropped the gloves in the opening days of the federal election campaign, with Wynne openly calling for the defeat of the Conservatives. And no wonder the premier is pressing ahead by announcing more details of how she plans to phase in the ORPP, starting in January 2017.

It’s far from certain that the new plan will ever see the light of day, or even be needed if the Harper Conservatives are turfed from office on Oct. 19. Both Thomas Mulcair’s New Democrats and Justin Trudeau’s Liberals agree with Ontario that Canadians need stronger retirement security. Both promise to expand the CPP if they win power – another good reason for voters to send the Tories packing.

Both opposition parties agree that Canada is heading for a retirement crisis. The CPP is highly respected and very good at what it does – but it doesn’t do enough. It covers annual earnings up to only $53,600, with a maximum yearly payout of just $12,780. That’s far from enough to secure a comfortable retirement for most people.

The obvious, common-sense solution is to expand the plan significantly, building on its low-cost structure and rock-solid reputation. That’s what Ontario and most other provinces wanted to see. But when Ottawa refused to move, the Wynne government took another path – setting up its own pension scheme for workers who aren’t covered by increasingly rare defined benefit plans at work.

On Tuesday Wynne laid out how her government intends to proceed. It will phase in the ORPP, starting in 2017 with companies employing 500 or more workers, then expand it to medium-size firms the next year and small employers in 2019. That’s a sensible approach that takes into account fears by business that the added payroll contribution (up to $4.50 a day) will be a heavy cost burden.

If the Conservatives stay in power, they have made it clear they will fight this plan at every turn, calling it a job-killing “payroll tax.” They won’t amend the law to allow the ORPP to be treated like the CPP for tax purposes; they won’t collect deductions on Ontario’s behalf; and they won’t provide any information to help the plan.

Instead, they will force Ontario to duplicate services that already exist for the CPP. They will refuse to facilitate a plan put forward by a government that won an electoral majority just over a year ago on this very platform. And they will withhold the kind of cooperation they routinely extend to other provinces (Quebec and Saskatchewan) that administer their own pension plans.

In other words, they will do their level best to sabotage a plan they don’t like put forward by a government they detest – all for transparently partisan reasons. Wynne calls this shameful attitude “blatant disrespect for the people of Ontario.” We agree.
The Harper government isn’t just out of step with the Ontario Liberals on the pension issues. It’s out of step with most voters, who know that in a world of increasingly precarious jobs government has an important role in protecting future retirement security. In a recent survey by Mainstreet Technologies, 59 per cent of 2,415 Toronto residents polled backed the ORPP.

If that survey is any indication, the Conservatives may want to re-think their stubborn opposition to meaningful pension reform. If they don’t, voters should keep it front-of-mind when they consider their choice on Oct. 19.

< http://www.thestar.com/opinion/editorials/2015/08/11/ontario-is-right-to-push-ahead-with-pension-reform-editorial.html >

Tags: ideology, jurisdiction, participation, pensions, poverty, standard of living

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