Touting Ontario’s new pension on Harper’s turf

An interview with Ontario’s associate minister of finance Mitzie Hunter on the Ontario Retirement Pension Plan

Ontario's associate minister of finance Mitzie Hunter. (ALEX GUIBORD/CP)

Ontario’s associate minister of finance Mitzie Hunter. (ALEX GUIBORD/CP)

Among the hottest issues on the federal campaign trail is Ontario Premier Kathleen Wynne’s plan for a new provincial pension, which is vehemently opposed by Stephen Harper’s Conservatives. Wynne’s Ontario Retirement Pension Plan (ORPP) would be mandatory for any Ontario worker not already covered by a comparable workplace pension.

About 3.5 million workers would be covered by 2021 when the ORPP is fully phased in, with those employees seeing 1.9 per cent deducted from their pay and their employers contributing an equal amount. Harper slams those deductions as “an enormous tax increase.” Ontario’s associate minister of finance Mitzie Hunter was in Ottawa today to defend the ORPP. This interview with her has been edited.

Q: One criticism that’s raised about your plan is that it’s forcing people to save rather than leaving it to them to plan for their futures. What do you say to that?

A: First of all, I’d say that it’s responsible. This is about ensuring that people have adequate income when they retire. When we look at the state of workplace pension plans right now, two-thirds of Ontarians have no pension plan at work. What we’re saying is the Canada Pension Plan [CPP], while it’s good, it’s not enough at $6,900 in benefits on average in Ontario. The CPP maximum is $12,500, but the average is a little less than $7,000.

Q: And what you’re aiming to do is augment the CPP with your new plan.

A: What we’re doing is strengthening the retirement savings floor. The ORPP is aiming to replace 15 per cent [of pre-retirement income]. If you combine that with CPP, that’s 40 per cent. We believe that’s a strong savings floor for people, and that is the responsible thing to do. People can continue to save for their retirement goals beyond that, and those voluntary tools are very important.

Q: There’s been a high-profile clash over this between your Ontario Liberal government and the federal Conservatives. In the end, if you can’t run the ORPP through existing federal institutions, wouldn’t it cost a great deal for you to administer the new pension separately?

A: We are proceeding. This plan will be implemented Jan. 1, 2017. We’re always concerned about the federal government not being co-operative. We believe they should be treating Ontario fairly. At the same time, we’ve been looking at other options. We’ve been looking at third parties.

Q: You’re looking for potential administrators of the pension outside the Ontario government?

A: Absolutely. In terms of being mindful of costs, that’s actually built into our legislation and our policy. This will be an efficient, well-managed plan, best in class. We’ll be benchmarking it against the best-managed plans anywhere in the world. We’ll be drawing on Ontario’s strength in pension management. We are setting up a strong governance framework. This week our premier announced that [former Bank of Canada governor] David Dodge will chair a nominating council, together with Claude Lamoureux, the former president and CEO of the Ontario Teachers’ Pension Plan, as well as Gail Cook-Bennett, who was the first chair of CPP Investment Board. That will assist us in putting together the best board and CEO.

Q: There’s a federal election on, and Prime Minister Harper is saying businesses in Ontario don’t want this. It’s just an additional cost when it comes to hiring and employing people. How do you respond?

A: Well, yes, there is a federal campaign. But we can’t play politics with people’s pensions. This is about ensuring that when people retire they retire with adequate incomes. An aging population, low savings rates, declining workplace-based pensions—all these things combined really show that we have a crisis on the horizon. I’ve done consultations right across this province and talked to businesses of all sizes, and workers. The concern that we should have when it comes to Ontario’s economy is that if people retire without adequate income, that has the potential to slow consumption. It’s not good for the individual, it’s not good for business, and it’s not good for the economy as a whole.

Q: But what about those business concerns about payroll deductions?

A: We are mindful of business and the impact on business. We have introduced a staged approach, enrolling the largest employers first, followed by medium-sized ones, and in 2019 the smallest employers. And we’re also phasing in contributions.

Q: We’re talking about this within sight of Parliament Hill. I don’t see Ontario cabinet ministers around here all that often. Why did you come to Ottawa to talk about this issue?

A: We want to ensure that this message is taken broadly. 3.5 million Ontarians will be benefiting from the ORPP. By 2020, all Ontario workers will be in the ORPP or a comparable workplace pension plan.

Q: But are you here specifically because you want to be talking about this where the federal election is top of mind?

A: The ORPP is beyond that. It’s about future generations.


Touting Ontario’s new pension on Harper’s turf

  1. Given that the Liberals, first under McGinty, then under Wynne have been economic incompetents…..is anyone surprised there would be push-back?

    All this will do is force employers to fire a lot of people.

    Lastly, there wouldn’t be so much resistence if the Liberals had shown ANY competence in any file they have ever touched. Frankly, the screw-ups of this bunch of OISE rejects are too numerous to mention, but it has resulted in the theft/mismangement of over 14 billion dollars or so so far.

    I suspect that Wynne and her equally guilty incompetents are now regretting stating taht the reason for this tax grab is NOT securing funding for retirees….it’s about raising a lot of cash quick to bail them out of their former mistakes, and to fund future infrasctructure projects.

    One has to wonder how the pension fund is going to earn a return on the “investments” if the money has been pissed away on infrastructure. How does a train from toronto to Windsor earn a return on the money forcibly taken from workers to fund transit?

    What a scam…..

    Ontario, bend over and grab your ankles. Here it comes again.

    • James, I know you’re down in the dumps because of the Harp disaster, but please stop infllicting this kind of nonsense on the rest of us. Take up something soothing instead.

      • Emily,

        I don’t get “down in the dumps”. I’m in the position that no matter who gets in, or how much taxes are raised, it won’t really affect me that much.

        As for the Harp disaster…sorry, I don’t see it. But if it makes you feel better, just keep thinking that. I’ve already said it once….I’d rather see Mulcair get in than Trudeau. An intelligent socialist, is far more preferable than an idiotic lightweight like trudeau.

        • LOL the whole country sees it James. And so do you. Switching parties already eh? Tsk tsk

          • I don’t park my vote with a Party…..I vote for whomever has the best policy. Right now, that is the Conservative Party. In the early 1990’s, it was the Liberals.

            I would never vote NDP, but given the choice between Mulcair or Trudeau, I think Mulcair may bankrupt the country, but he wouldn’t be an embarrasment. Trudeau would do both.

    • I’m surprised that as a conservative you don’t understand the difference between taxes (relating to general revenues) and pension plans (investments held in trust). But hey, you and the rest of the Con crowd can keep jumping on the bandwagon that this is a tax.

      I’d be surprised if anyone lost jobs because of a 1.9% increase phased in over 5 years. There are bigger forces at work.

      Economics for Cons does not equal economics for economists.

      • SCOTTYAB wrote:
        “I’m surprised that as a conservative you don’t understand the difference between taxes (relating to general revenues) and pension plans (investments held in trust). But hey, you and the rest of the Con crowd can keep jumping on the bandwagon that this is a tax.”

        Scotty, perhaps you should go back and re-read my initial comments. Clearly, you glossed over the part where I wrote:

        “One has to wonder how the pension fund is going to earn a return on the “investments” if the money has been pissed away on infrastructure. How does a train from toronto to Windsor earn a return on the money forcibly taken from workers to fund transit?”

        That was my entire point. The money taken from workers and employers will NOT BE USED TO INVEST in funds to earn a return. It is going to be used to pay for Wynne’s promises to improve infrastructure. Hence: Money is going to be spent, and not invested on behalf of those who contribute.

        Double hence: Therefore, it is definitely just anothe tax, regardless of what the Liberals want to call it. You take money from folks and give them nothing in return, it is just a money grab.

        Wynne and the Liberals don’t care about that though, as by the time the pension payments are due, they will be long gone. It will take 20 years to fix the mess the Liberals have made of this once “Have” province.

  2. The Ontario Pension Plan is a highly regressive payroll tax on the poor.

    The working poor will lose the guarenteed income supplement by paying this regressive payroll tax (and losing income now), and get no extra income when they retire because they will lose the GIS because they receive this stupid pension. Meanwhile the wealthy will be receiving pension cheques from the government.

    It is a plan that seems like it will help poor people, but it does the exact opposite.

    Kathleen Wynne is so massively incompetent and wrong about everything.

      • Anyone else notice how easily emily laughs about taxpayers being shafted repeatedly by the Liberals in Ontario?

        Guess that’s the mindset when one personally doesn’t pay taxes.

        • Cons are hilarious.Especially when they’re losing.

      • Wynne’s pension plan: poor people pay for enhanced pensions for the middle class and wealthy. Reverse Robin Hood. The woman is a fool.

        from Kevin Milligan in the competition GM

        The second problem with the ORPP is a mismatch with the pension problems we actually face. The ORPP doesn’t focus just on middle earners, but also covers low earners. Our current retirement system pays Old Age Security and the income-tested Guaranteed Income Supplement to those who had low earnings during their work lives. The combined pension income for these low-earning Canadians is often more than they were making when working.

        An expanded ORPP effectively transfers money away from these low earners when they are struggling in their working years to a time in retirement when they are already doing a bit better. Moreover, these low earners will pay full ORPP premiums on their earnings, but lose up to half the value of their ORPP benefits because of income testing of their other benefits. Expanded earnings-related pension coverage for low earners is a very bad deal under our current system.

    • At least the people of ontario are staring to see that now. I just hope Wynne keeps up her fight with Harper, and Harper reminds folks that she and Trudeau are BFF’s.

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