Ontario approves bill to create provincial pension plan to start in 2017

An Ontario Retirement Pension Plan is on its way. Mario Beauregard / The Canadian Press

TORONTO – Ontario has passed legislation to create a provincial pension plan for people who do not currently have a workplace pension plan, starting Jan. 1 2017.

The Liberal government used its majority to give final reading to the bill to create an Ontario Retirement Pension Plan, insisting the province must take action because the federal Conservatives refuse to enhance the Canada Pension Plan.

Financial news and insights delivered to your email every Saturday.

READ MORE: Public consultations begin for Ontario retirement pension plan

Associate Finance Minister Mitzie Hunter says about two-thirds of Ontario workers do not have a workplace pension, and virtually all of them will be forced to join the provincial plan.

Mandatory 1.9 per cent contributions from employers and workers will be phased in over two years, starting with larger companies in 2017 before moving to smaller operations like convenience stores and dry cleaners.

Story continues below advertisement

Business groups warn that forcing workers to pay up to $1,643 a year for a provincial pension — and mandating that employers match those contributions for every employee — will drive up costs and result in fewer jobs.

The Progressive Conservatives call the Ontario Provincial Pension Plan a job-killing payroll tax, but the New Democrats say it’s the “best option” for workers until the Canada Pension Plan is enhanced.

Sponsored content