Minister unable to say who won’t have to pay into Ontario Pension Plan

TORONTO – The minister responsible for implementing the Ontario Retirement Pension Plan says the premium won’t hurt small business but she is unable to say who will and who won’t have to pay up because consultations on the plan are still ongoing.

“We committed to consulting on what is a comparable plan, so we’re doing a lot of listening right now. Going out and meeting with small and medium size businesses, and everyday Ontarians,” Mitzie Hunter, the Associate Finance Minister said in an interview on Global’s Focus Ontario.

Some Ontario workers will have to pay 1.9 per cent of their pay cheque towards the plan which will be matched by their employer.

The Ontario government has previously said federally regulated employees in Ontario and companies with “comparable” plans won’t have to pay in – but what comparable means, Hunter couldn’t say.

The plan isn’t a pension a retiree could solely rely on – it’s more of a top up to the Canadian Pension Plan. According to the Ontario Liberal Party website, a person earning $45,000 who worked for 40 years can expect an annual ORPP benefit of roughly $6,410. The same person could expect roughly $10,680 from CPP.

Hunter said the plan is essential as two-thirds of Ontarians no longer have a workplace based pension.

“So there is a gap there that we do really need to address because we know that as our population ages that people are at risk of retiring and they haven’t saved enough for that,” she said.

Tweet This Click to share quote on Twitter: "So there is a gap there that we do really need to address because we know that as our population ages that people are at risk of retiring and they haven't saved enough for that," she said.

Premier Kathleen Wynne made the ORPP a central plank in her re-election campaign but the plan isn’t without its detractors.

Federal Finance Minister Joe Oliver said during the campaign in May the Ontario economy is too fragile to support the plan.

“It’s not the time, in my opinion, to impose this type of tax when the Ontario economy is so fragile,” Oliver said, according to CBC.

But Martin Regg Cohn, a political columnist for the Toronto Star, said the idea the pension premium will hurt small business is a “fiction.”

“This is not going to demolish small business. That’s a fiction; it didn’t happen with the minimum wage, it didn’t happen with the Canadian Pension Plan, and it’s not going to happen with this relatively modest enhancement to the CPP,” he said.

The plan won’t be implemented until 2017 – after the next federal election.

And there has been some speculation that a Liberal or NDP government in Ottawa could sink the plan by expanding CPP.