(TORONTO, ON) – The Government of Ontario is calling on the Federal Government to reverse their position on the implementation of the Ontario Retirement Pension Plan. Ottawa refuses to assist Ontario in initiating ORPP.
Following the Federal Government’s unilateral decision to shut down discussions on Canada Pension Plan (CPP) enhancement in 2013, Ontario announced it would move forward with the ORPP. When fully implemented, the ORPP will provide workers with a predictable stream of retirement income for life.
The Ontario Retirement Pension Plan would expand coverage to more than three million working Ontarians. Funds would be administered by an independent, arm’s length entity with a strong governance structure.
Sixty-five per cent of workers in Ontario do not have a workplace pension plan. Coverage for workers in the private sector is even lower, with only 28 per cent having the benefit of plan membership. Studies show that a significant portion of Ontarians will not have sufficient savings to maintain similar living standards throughout their retirement years. The Canada Pension Plan, on average, pays out only $6,900 annually.
As part of the implementation process, Ontario has engaged Ottawa in discussions around leveraging existing Canada Revenue Agency (CRA) infrastructure to help implement the ORPP. As with other similar arrangements, Ontario offered to pay the CRA for its services.
The use of the CRA infrastructure would provide savings in terms of administration costs, which would in turn be passed on to employees and employers.
However in July, the Feds signalled an end to those discussions with a letter indicating they would not assist Ontario in the implementation of the ORPP. The refusal to accommodate Ontario’s reasonable request for CRA co-operation is out of line compared to these existing agreements.
“We call on the federal government to stop burying its head in the sand on generational issues, and help Ontario build a secure retirement system for the people of Ontario,” said Mitzie Hunter, Associate Minister of Finance for the ORPP. “Through co-operation, we can help working Ontarians strengthen their retirement savings, while creating a brighter economic future for Ontario and Canada.”
Ontario has identified at least 28 CRA administered programs and 88 data exchange agreements that exist between the federal and provincial governments. As well, a cooperative agreement exists with the Quebec Pension Plan and legislative changes were made to the federal Income Tax Act in 2010 to increase the annual contribution limit to the Saskatchewan Pension Plan.
Given this precedent, Ontario is demanding that the federal government reverse its position on the implementation of the ORPP.