Labour Movement Backs Ontario Pension Plan
TORONTO – Most employers and employees would have to pay into a proposed made-in-Ontario pension plan to make it work, Premier Kathleen Wynne says.
The Ontario government has named a technical advisory to help develop a provincial retirement security system that would be an addition to the existing federal CPP plan.
“There needs to be a mandatory aspect to this in order to have the number of people involved that makes it a viable plan,” Wynne said. “But some of the plans that exist in other jurisdictions, there’s an opt-out clause. So people actually will have a choice to be able to opt out.”
Wynne suggested that Ontarians who have saved enough for their golden years could choose not to participate in the plan, although she said the experience in other jurisdictions shows few people do.
The Ontario and federal governments are at odds over how to get citizens to save more for their retirement.
Ontario Finance Minister Charles Sousa said experts believe a person needs 50%-70% of their pre-retirement income to live comfortably but CPP pays a maximum of $12,000 a year.
There was almost $300 billion in unused RSP contributions in Ontario in 2012, Sousa said.
The Stephen Harper government has passed legislation that would, with support from provinces, create Pooled Registered Pension Plans.
Under the federal proposal, individuals including the self-employed would have access to a low-cost pension plan and employers would not have to put any money into it.
Ontario favoured an enhanced CPP, which requires both employers and employees to pay premiums, but has now vowed to go it alone with a provincial plan.
The Harper government has criticized Wynne’s idea as a job-killing tax on businesses and workers.
”I understand that that is one of the attacks that is coming at us,” Wynne said. “This is not a tax. This is about an investment in the future. It is money that goes into a plan that will allow people to retire more securely.
“This is not money that goes into the provincial treasury.”
The Canadian Labour Congress and the Ontario Federation of Labour agree that an Ontario pension plan should mirror the CPP. “Expanding the Canada Pension Plan would make the most sense for all Canadian workers,” said Hassan Yussuf of the CLC and Sid Ryan of OFL. “Without that national plan, the Ontario Retirement Pension Plan makes a lot of sense”