Ontario premier says no CPP deal if she wasn’t ‘thorn in the side’ of other premiers

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Ontario Finance Minister Charles Sousa comments on CPP reform
WATCH ABOVE: Ontario's Finance Minister Charles Sousa says the CPP reforms that were agreed upon is for future generations of Canadians – Jun 20, 2016

TORONTO – Ontario Premier Kathleen Wynne took credit Tuesday for the agreement reached by the country’s finance ministers to enhance the Canada Pension Plan.

It was Ontario’s constant demand to ensure people have an adequate retirement income and its decision to pass legislation creating a provincial pension plan that prevented the issue from languishing on the back burner, Wynne said.

“Quite frankly, I was a thorn in the side of many of my colleagues,” she said.

“I kept bringing this up. I kept making it clear that we were moving ahead, and I kept making it clear that we all knew that there was a national problem.”

READ MORE: Canada Pension Plan makeover was swift in policy-making terms

Ontario decided to create its own pension plan only after the previous federal Conservative government refused to consider anything that would increase premiums paid by employers, but always considered an enhanced CPP its preferred option, added Wynne.

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Finance Minister Bill Morneau and his provincial colleagues except Quebec and Manitoba – reached an agreement Monday to increase the maximum CPP benefit to about $17,478 a year from $13,000.

Employers will pay increased CPP premiums of about $408 a year for each employee, who will pay matching amounts, and they will be phased in over seven years, starting in 2019.

WATCH: Bill Morneau says CPP reform will improve retirement outcomes for future generations
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Bill Morneau says CPP reform will improve retirement outcomes for future generations

The smaller premium increase that would have been required under the ORPP should ease the concerns of some small businesses, said Wynne, who called the CPP a “wise investment” for companies and individuals.

“If we as a society determine that it is not worth an investment in people’s retirement, then we will pay for that down the road,” she warned.

“This is about making sure that in 10, 20 or 30 years we don’t have an impoverished group of people who worked all their lives but are not able to support themselves.”

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Benefits under the enhanced CPP would be about two-thirds of what Ontario workers would have received under the ORPP, while the payroll deductions and employer premiums will start one year later, in 2019.

The province made those compromises in order to secure the CPP deal, Wynne said.

“Had we not continued to work to implement the Ontario Retirement Pension Plan, had we not continued to put this issue on the table squarely with our colleagues across the country, I firmly believe that we would not be here today,” she said.

Wynne said she got a sense about a month ago that there might be a way to reach a national deal to improve CPP benefits, but kept pushing ahead with the Ontario plan anyway, even appointing a minister responsible for the ORPP just last week.

“We needed to have that minister in place to make it clear to the people of Ontario, and to the national discussion, that we were determined to move head on the ORPP because there was a 50-50 chance we were going to have to implement the ORPP,” she said.

The premier couldn’t say how much it would cost to wind up the corporation that was created to administer the ORPP, which already has 50 employees, or how much was spent preparing for the provincial plan that will no longer be needed.

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“We had to make those investments in order to get here,” she said.

READ MORE: Feds, most provinces agree on CPP reform; premiums to increase in 2019

“It was absolutely worth the cost.”

Wynne insisted there were “offsetting benefits” to the CPP agreement, including the fact it will be less expensive to administer than a stand-alone provincial plan, and it will be seamless for businesses and portable for workers who move between provinces.

“All of those benefits really do contribute to the success of this moment,” she said.

READ MORE: Canada Pension Plan makeover was swift in policy-making terms

Ontario’s Progressive Conservatives were pleased to see the ORPP being scrapped in favour of increased CPP benefits, but called for a report on the cost to prepare the provincial pension plan and set up its administration corporation.

“We have seen this government appoint Liberal insiders, who will be paid thousands of dollars in severance, and continue to spend millions of dollars on advertisements in its push for the ORPP,” said PC critic Julia Munro.

The New Democrats like an enhanced CPP, but said there was much more to do to help those nearing retirement who won’t benefit from the proposed changes.


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