Governments reach an agreement on pensions


Ministers from the Ontario and Canadian Governments have reached an agreement on pensions, following the Province’s decision to establish an Ontario Retirement Pension Plan [ORPP], which was originally scheduled to be launched in stages, beginning next year.

Bill Morneau, Minister of Finance for the Government of Canada, Charles Sousa, Minister of Finance for the Government of Ontario and Mitzie Hunter, Associate Minister of Finance for the Government of Ontario, made a joint announcement on the new agreement last week. They pointed out that many Canadians are not saving adequately for retirement and, unless action is taken, will face a decline in their standard of living when they retire. The governments of Canada and Ontario have both prioritized improving retirement income security.

The provincial statement reads, in part: “Ontario welcomes the federal government’s leadership in renewing a national dialogue to enhance the Canada Pension Plan (CPP), and is committed to continuing to work collaboratively with the federal government, provinces and territories to make progress on a national solution that addresses the needs of future retirees.”

The statement goes on to note that, in order to provide more time for discussion among provinces and the federal government, Ontario is proposing to phase-in the launch of the ORPP by starting enrollment in January 2017, one year later than the original start date, and by starting the first phase of contributions in January, 2018. This will give businesses more time to enroll, and provide about 400 businesses with the additional time they have been seeking.

It is planned to widen the consultations on pensions to include other provinces and jurisdictions in the coming months, with the hope that there will be something definite to bring before the Federal-Provincial-Territorial Finance Ministers meeting in June, 2016.

In announcing the joint agreement, the Canadian Minister for Finance, Bill Morneau, took pains to restore some mutual respect to the federal-provincial relationship, after the more fraught days of the Harper Government.

“In the spirit of collaboration, the federal government acknowledges that the Ontario Government has made important first strides in establishing the ORPP. If provincial agreement on CPP enhancement is not reached, the federal government acknowledges the Government of Ontario’s objective to move forward with the ORPP. As such, the federal government has agreed to facilitate plan registration and data sharing arrangements, and will work with Ontario to ensure that key elements of plan administration, such as the collection of employer and employee contributions, are completed efficiently and cost-effectively.”

Nevertheless, Charles Sousa, Minister of Finance for Ontario, was keeping all options open, in case a satisfactory agreement is not reached: “The Government of Ontario remains committed to finding a solution which will allow the needs of Ontario employees to be met under a national framework. Our main objective is to intensively look at ways to meet the goals of the ORPP in an enhanced CPP framework, while preserving our ability to implement the ORPP, should that not be possible.”

Minister Morneau was confident of better things ahead: “We believe in a Canada where people who work hard can look forward to a good standard of living, a secure retirement, and better prospects for future generations. Working with provinces and territories expeditiously to enhance the Canada Pension Plan is part of our government’s commitment to the middle class and those who have been working hard their whole lives to earn a secure and dignified retirement. We know Canada works best when we all work together. For this reason, we will continue to work with Ontario on ORPP administration while pursuing our ultimate goal of one national uniform enhancement to the CPP.”


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