Harper slams Ontario pension plan after Wynne reveals new details

theglobeandmail.com
Aug. 11, 2015
By Jane Taber

The feud over the proposed Ontario pension plan escalated Tuesday after Premier Kathleen Wynne revealed new details about the retirement supplement and Stephen Harper labelled it a payroll tax that will kill jobs and hurt middle-class families.

The Ontario Retirement Pension Plan, which starts in 2017 with benefits paid out to workers beginning in 2022, has been a political flashpoint between the Liberal Premier and the Conservative Leader even before he called the election more than a week ago.

Liberal Leader Justin Trudeau says he doesn't believe the Harper government is sincerely planning to go ahead with a voluntary expansion of the Canada Pension Plan. NDP Leader Tom Mulcair calls the move an election ploy.

The province says its initiative will help 3.5 million Ontarians when they retire, but will be rolled out over several years. Contributions from employers and employees will also be phased in.

The federal government, however, has refused to help Ontario administer the plan. At an event in Markham Tuesday, Mr. Harper said he was “delighted” Ottawa’s decision is “making it more difficult for the Ontario government to proceed.”

The Conservative Leader turned up the campaign rhetoric by saying that Liberal counterpart Justin Trudeau wants to “work with the Ontario Liberal government to make this tax apply across the country and make it easier to put into effect across the country.”

Mr. Harper criticized the plan by saying, “This tax increase would be bad for middle-class families, it would be bad for jobs and it would be bad for our economy and that’s why so many people out there are opposing it.”

Ms. Wynne, however, is not backing down. The ORPP is a centrepiece of her government and was a main plank in her election platform last year.

She called her recent fight with the Conservative Leader an “unfortunate conversation.” But it doesn’t take away from her resolve to move ahead with the pension plan.

“The fact is that Stephen Harper has decided that there isn’t a need across the country [to enhance the Canada Pension Plan] and is now standing in the way of trying to help us to implement this plan,” she said.

Mr. Trudeau’s communications director, Kate Purchase, told The Globe and Mail that Ontario is “acting on its own because there is a total failure of leadership from the current federal government.”

In an e-mail, she wrote, “Retirement security is critical to strengthening the middle class and growing the economy. We want to work with Ontario and other provinces to expand the CPP.”

Beginning in January, 2017, employers with 500 or more workers, who do not have registered pension plans, will contribute to the plan. The contributions will be phased in. For example, in 2017, large employers and their employees will each contribute 0.8 per cent, and by 2019, they will contribute 1.9 per cent.

In 2018, medium-sized employers - 50 to 499 employees - will start their contributions. In 2019, small employers, with fewer than 50 employees, will join. By 2020, the government hopes every Ontario employee will be enrolled in either the ORPP or a comparable workplace pension.

An employee earning $45,000 a year would collect $6,410 a year at the end of 40 years; an employee earning $90,000 a year would collect $12,815 after 40 years.

About 50 per cent of workers in Ontario do not have a workplace pension plan or contribute to an RRSP, the government says. Under the proposed plan, workers between 18 and 70 are eligible. Employees with workplace pension plans “comparable” to the ORPP will not be eligible.

Ms. Wynne, meanwhile, acknowledged her government does not know how much the plan will cost to administer.

The federal government administers the CPP and the cheapest way to run the provincial plan would be to dovetail with Ottawa. Now, the province may have to consider a number of options, including procuring a private-sector partner, according to an official at a background briefing Tuesday morning.