This article was last updated on April 16, 2022
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The Liberal Ontario government has announced to be taking its first legislative step toward creating its own provincial pension plan. A press conference hosted by Finance Minister, Charles Sousa, and Associate Finance Minister, Mitzie Hunter, on Monday revealed the framework legislation that will build on to the creation of the Ontario Retirement Pension Plan (ORPP).
The legislation said that the mandatory ORPP is designed to complement the Canada Pension Plan (CPP) and would deduct 1.9 per cent of the pay of Ontarians who do not have a workplace pension plan. Additionally, the employers would also be forced to match that contribution. Sousa stated that “there are some extreme points of view claiming this to be a tax — just as they did when CPP was introduced. These are premiums, these are contributions made by individuals into their savings plans for themselves.” It was stressed that “none of this money comes into the coffers of the government. It’s managed outside of government. They (are making) the same argument today as they made about CPP in the 1960s.”
On the other hand, Hunter said that that it is still preferable that the federal government enhances CPP, which pays out a maximum benefit of $12,500 a year. However, Prime Minister Stephen Harper has straightforwardly refused to augment the national pension scheme and hence the provinces are forging ahead on its own. According to the announcement made at the press conference, the legislation unveiled on Monday commits to establish the ORPP by Jan. 1, 2017.
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