Ontario Moves Ahead With Pension Expansion; Other Provinces Watch Closely

Ontario is moving forward with its planned expansion of retirement benefits, even if other provinces aren’t yet following.

The rest of Canada will eventually follow, but the country is currently studying various angles of retirement benefit expansion. A decision will come in December.

More from The Globe and Mail:

The ORPP will apply to people who do not already have a comparable workplace pension. It will be funded by contributions from workers, matched by their employers. For someone earning $45,000 annually, the ORPP would return $6,410 a year in retirement if paid into for an entire working life; for someone earning $90,000 or more, that figure would be $12,815.

The pension plan will be administered at arm’s length from the government and run by civil service veteran Mr. Rafi. Formerly the top bureaucrat in the province’s massive health ministry, he most recently handled the high-profile assignment of steering the Pan American Games in Toronto last summer. Between salary and bonuses, he will be eligible for up to $656,250 in annual pay in his new job.

While Ontario leaps off the diving board, the rest of the provinces are huddled nervously by the shallow end, tentatively dipping their toes in the water.

Prime Minister Justin Trudeau pledged to pursue CPP enhancement in his winning campaign last year, and Mr. Morneau is now trying to reach a consensus with the provinces. Any expansion of CPP must be agreed to by Ottawa and at least seven provinces representing two-thirds of the country’s population.

Mr. Morneau’s spokesman said he is “absolutely committed to ‎moving forward on enhancing the CPP,” but he does not have a preconceived notion of exactly what the enhancement will look like – whether similar to the ORPP or something else.

Canada is currently studying the effects of expanding retirement benefits; how businesses would react, how GDP would be affected, and which workers the expansion should affect in the first place.

Photo credit: “Canada blank map” by Lokal_Profil image cut to remove USA by Paul Robinson – Vector map BlankMap-USA-states-Canada-provinces.svg.Modified by Lokal_Profil. Licensed under CC BY-SA 2.5 via Wikimedia Commons