Ottawa will not co-operate with Ontario pension plan

Oliver says ORPP will result in job-killing payroll tax



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TORONTO – Finance Minister Joe Oliver is telling Ontario the federal government will not co-operate in any way with the province’s move to create its own pension plan.

Oliver sent a letter to provincial Finance Minister Charles Sousa on Thursday saying the Conservatives “will not assist the Ontario government” in the implementation of the Ontario Retirement Pension Plan.

“This includes any legislative changes to allow the ORPP to be treated like the Canada Pension Plan for tax purposes, or to integrate the ORPP with the RRSP contribution limits,” wrote Oliver. “Administration of the ORPP will be the sole responsibility of the Ontario government, including the collection of contributions and any required information.”

The provincial Liberals passed legislation in April to create the provincial pension plan, which would effectively mirror the CPP for about three million workers.

Sousa called Ottawa’s position “extremely disappointing” in a statement Thursday evening.

ORPP: Half of Ontarians may not have to save for retirement »

“Like other arrangements between the federal and provincial governments, our expectation was to enter into a service agreement with CRA or Service Canada, something that would have tremendous advantages for businesses and employees,” said Sousa. “The federal government’s refusal to work with Ontario puts politics ahead of practicality.”

Ontario has said repeatedly its preference would be to enhance the CPP, but the Harper government has always rejected the idea so the province decided to act on its own.

Too many people are not saving enough for an adequate retirement income despite voluntary options such as tax-free savings accounts and registered retirement savings plans, said Sousa.

“After a lifetime of working hard and contributing to the economy, Ontarians deserve a secure retirement,” he said.

The Conservatives warn the Ontario plan will amount to a job-killing payroll tax because it will require contributions from employers and workers in any company that does not have a workplace pension.

Workers will have to contribute 1.9 per cent of their pay, to a maximum of $1,643 a year, which employers will have to match for every employee.

“The ORPP would take money from workers and their families, kill jobs and damage the economy,” warned Oliver. “Your government has not provided any assurance regarding what benefits, if any, would accrue to Ontarians.”

The mandatory contributions will be phased in over two years, starting with larger companies in 2017 before expanding to include small operations like convenience stores and dry cleaners.

The Liberals say the deductions for the ORPP begin at the same time the federal government is expected to reduce Employment Insurance premiums.

6 comments on “Ottawa will not co-operate with Ontario pension plan

  1. Fantastic news! ORPP is a terrible idea – I’d be ok if there was some kind of conditional opt out clause


  2. Great news! The Provincial Gov’t has already proven their inability to manage funds of ANY kind. They are not big brother so stop patronizing taxpayers when this is another tax grab. Clean house first and then invest those excess funds in a pension plan program that is funded by tax dollars already in the hands of the province. The arrogance is stifling.


  3. So should I even open a group RRSP at this point?

    Step One: of Kathleen Wynne’s ORPP Plan. Initiate payroll tax to start the ORPP program.. ~3% match for employee/employer.. Instruct ORPP (Wynne’s friends and cronies) board to hold off on foreign (incl national) investing for a period of 5 years to build the fund’s cash..

    Step Two: The ORPP will purchase bonds from the Ontario Government. As the ORPP cannot invest elsewhere (outside country/province). Ontario will be deemed as “safe” and will be a massive part of the initial few years..

    Our money floods into Wynnes’ hands..

    Step Three: Fund the Infrastructure spending plan announced in the Ontario Liberal Party budget.

    Step Four: Well step four is irrelevant as we are already screwed (and the libs achived the objective).. Liberals will have amassed even more debt.. With the inability to pay it’s debt the province will be downgraded further costing even more to keep borrowing..

    By this time most companies are seeing the writing on the wall and offering empoyees an alternative private plan in order to not pay into the ORPP.

    Step Five: Wynne dissolves the ORPP (or opposition party [elected] will kill the ORPP or leave it for 30+ years in hopes of recovery) as the fund would have essentially collapsed. Ontario spirals into insolvency – While the rest of the country thrives. Ontarians take a haircut.. The question is how much???

    I asked for fiscal responsibility with my vote.. What did you ask for?

    I know there are likely laws and the fiduciaries obligations of investment managers etc etc. I like to think anything can happen in a “free” market so i’m a little concerned.. What do you think? Keep an open mind – weirder stuff has happened…


  4. This is good news. Wynne wants a program, she should run it and not try to fob it off onto any other government. I don’t want or need another government pension fund – I’ve done a great job of saving for retirement on my own. I’m 60 and self-employed and don’t know when I’ll stop working, as I really enjoy what I do. But if I’m forced to sign on and pay both the employer and employee’s portions, I might just hang it up early. Goodness knows, the returns on whatever I put in will be negligible.


  5. Citizens are already strapped for cash, while bank fees, hydro deals that don’t make any sense, suck the life out of us. Allow us the dignity of choosing to contribute to our own plans. Get our of our pockets! What makes anyone think that our government can handle funds.


  6. Lets look at this for what it is. A headline to attempt to get votes and try to vilify the PC’s with an unfair negative spin on this. Its so black and white. If Mr. Harper somehow agreed to this, every other province would expect the same would they not? Why does Kathleen not join up with Saskatchewan’s P. Plan? Apparently it’s open to anyone in Canada already that has room in their RRSP and its a well run, low cost, decent performing plan. Plus the infrastructure and management is already in place, maybe they could make a deal?…


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