WATCH: he Premier of Ontario says people deserve a new provincial pension plan, because Stephen Harper refuses to enhance the existing Canada Pension Plan. Kathleen Wynne for into a war of words with Harper over it Tuesday, both claiming they have the voter’s best interests at heart. Vassy Kapelos reports.
TORONTO — Ontario Premier Kathleen Wynne and Prime Minister Stephen Harper are ramping up their war of words over the Liberal government’s new provincial pension plan.
As Wynne was unveiling details of the Ontario Retirement Pension Plan in Toronto, Harper went out of his way to slam the idea as “an enormous tax increase” during a campaign event in nearby Markham.
After answering questions from reporters – none of them about the ORPP – Harper returned to the microphone to raise the issue, saying he was “delighted” that Ottawa’s refusal would make it more difficult for Ontario to implement the pension plan.
The prime minister said it would be bad for the economy and bad for jobs, noting small businesses have warned they’ll have to cut jobs to meet the extra costs of a new pension plan.
Wynne admits she doesn’t know how much it will cost to create and administer the provincial pension without any help from the federal government, but she vows to proceed.
The premier says people aren’t saving enough for retirement, and adds that Harper’s refusal to enhance the Canada Pension Plan left Ontario with no choice but to create its own.
The Ontario plan will require companies to pay premiums of 1.9 per cent of salary for each employee, up to $1,643 a year, and workers will pay an equal amount.
The provincial plan will be phased in starting in 2017 for larger employers with 500 or more workers and no pension plan. That will be followed by medium-sized employers starting on Jan. 1, 2018, while businesses with 50 or fewer employees will have to start contributions on Jan. 1, 2019.
Companies with pensions that equal at least eight per cent of an employee’s salary would be exempt from the Ontario plan, as long as the employer contributes at least four per cent.
Employers with a workplace pension plan that isn’t adjusted to meet the government’s comparability test, as well as employees who aren’t members of their workplace’s comparable plan will start contributions on Jan. 1, 2020.
The Liberal government defines a comparable plan as one that provides a “predictable stream of replacement income and an adequate standard of living in retirement similar to the benefit that would be provided by the ORPP.”
Existing defined benefit plans will need to have an annual benefit accrual rate of at least 0.5 per cent to be considered comparable.
Ontario passed legislation in April to create the provincial pension for more 3.5 than million people who do not have a workplace pension.
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