TORONTO – Ontario Premier Kathleen is blasting the federal Conservatives for cutting the province’s transfer payments and refusing to talk about enriching the Canada Pension Plan, which has strengthened her resolve to set up a provincial plan.
Wynne, who has been mocked for calling for “conversations” on almost every issue, seemed particularly irked by what she called a trend to shut down discussions with provinces on many important matters, such as retirement income and job training.
“This is a pattern with this federal government,” she said Wednesday.
“My hope is that we’ll be able to find a more constructive way to move forward, because what’s been going on in the recent months is not constructive and I don’t believe is in the best interests of either the people of Ontario or, in the case of CPP, the best interests of the people of the country.”
All the provinces and territories agree that changes need to be made to CPP to provide Canadians with a more secure retirement, but the Harper Conservatives still refuse to listen, she said.
Other finance ministers who met with Finance Minister Jim Flaherty on Monday said they too were taken aback by his response.
“I was a bit surprised at how blunt he was that the discussion was over, a little bit surprised at how blunt and quick the end of the meeting came, because I haven’t been in a (federal, provincial, territorial meeting) where that has happened in the past,” said Alberta Finance Minister Doug Horner.
“It is worrisome because we believe they should be at the table for the discussions, and we are going to continue to have those discussions without them at the table, I guess.”
Ontario is going to set up its own pension plan, Wynne said, and it’s not a bluff to bring the Tories back to the table. Other provinces are also talking about doing the same.
Quebec and Saskatchewan already have their own pension plans. Alberta is pursuing pooled registered pension plans.
But Ontario’s Finance Minister Charles Sousa said there is “some degree of interest and support” among other provinces to set up their own plans.
Sousa’s predecessor Dwight Duncan once mused about a made-in-Ontario solution, but later dismissed it, saying it would be too costly and take too long to implement.
“Dwight’s not standing here, and I’d be happy to talk to him about what I believe we need to do going forward,” Wynne said of her former cabinet colleague.
“This is about a government taking an initiative on something that is a long term issue.”
Horner said it’s not impossible, but it is costly. The risk is spread out over fewer people because there are fewer contributors to the plan.
The federal government said expanding CPP could eliminate tens of thousands of jobs, largely due to the extra contributions employers and employees would be required to make.
“We all want a stronger retirement system but we are wary of the significant costs – including smaller paycheques and lost jobs – for Canadian families and the risk to our economic growth a CPP expansion would trigger,” Kevin Sorenson, minister of state for finance, said in a statement.
But a provincial plan is far more effective than the other options, said Susan Eng of CARP, a advocacy group for seniors.
“You have the broadest penetration, the most affordable type of opportunity and you have what you want, which is a pooled fund that allows you to save adequately for retirement,” she said.
Wynne couldn’t say how much an Ontario pension plan would cost, what it would look like or how long it would take before it was launched. She said she’d have to consult with business and labour groups, among others, to figure out what would work best in the province.
She also accused the Tories of balancing their books on the backs of Ontarians by cutting the amount of federal dollars that’s returned to the province by $641 million next year – again with no discussion.
Ontario puts in $11 billion more in federal taxes than it gets back in transfer payments and services, she said. Yet it’s the only province whose payments will go down.
The decline comes from a decrease in Ontario’s equalization payments, a wealth-sharing program among the provinces that’s calculated through a legislated formula.
Finance officials say the amounts are adjusted year-to-year based on a province’s economic strength. Ontario’s share in 2014 has changed because its economy improved relative to other “have-not” provinces.
They said there was a temporary measure that was brought in three years ago during the economic downturn, to ensure the provinces wouldn’t see a year-over-year decline in their total transfer payments. But it ends in 2014.
While health and social transfer payments are going up, Ontario’s equalization payments will fall from $3.1 billion this year to almost $2 billion next year.
Sousa called it an attack on Canada’s most populous province, which has contributed more to the federation than any other.
“It was always a temporary one until such time as Ontario’s affected,” he said.
“If other provinces were affected to the degree that we are today, they would have demanded, as we are now, looking for that protection.”
But the opposition parties say Sousa can’t lecture Ottawa on money management when the Ontario Liberals are facing a nearly $12-billion deficit and wasted up to a $1 billion to cancel two gas plants before the 2011 election.
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