Ontario is definitely pressing ahead with its goal to implement its Ontario Retirement Pension Plan (ORPP) initiative by 2017. This was the message Mitzie Hunter, associate minister of finance, shared at the Conference Board of Canada’s Pensions Summit in Toronto on Monday.
She informed the crowd that Ontario’s Finance Minister Charles Sousa would soon introduce legislation to create the entity behind the plan.
“I can assure you that legislation will reflect the best practices of good governance used by many [public sector] pension plans,” said Hunter, “as well as the principles of independence, accountability and cost-effectiveness and the highest possible level of performance in pension management.”
She also said there will soon be more details on the design of the plan though she did not provide any specific timelines as to when industry groups will learn more about the government’s response to their concerns.
Ontario’s Ministry of Finance is currently poring over more than 1,000 submissions made to the government during the consultation process for the ORPP.
Hunter acknowledged there are many different opinions regarding issues such as the minimum earning threshold; the best way to assist the self-employed; and the definition of a comparable plan.
Some groups, including the Portfolio Management Association of Canada (PMAC) and the Canadian Life and Health Insurance Association (CLHIA) are calling for a more open definition of a comparable pension plan that will allow businesses to be exempt from implementing the ORPP. The government’s position is that businesses with a defined benefits plan will not be required to start ORPPs for employees. However, some industry groups, including PMAC and CLHIA, believe that companies with defined contribution plans should also be included.
While some organizations are calling for that, Hunter has also heard opinions that the government should scrap the idea of a comparable plan altogether and make the ORPP universal.
However, she assured the crowd the province is sensitive to the concerns of the business community and is taking steps to mitigate the short-term impact that ORPP implementation will have on employers. This is why employers will be enrolled in stages, with the province’s largest companies going first. Also, contributions to the plan will be phased in over two years, she said.
What the province does not plan on doing is waiting to see which political party forms the federal government following this year’s upcoming election. Some who are opposed to the ORPP have suggested that Ontario hold off on plans to see if a more sympathetic Liberal Party, who may be open to enhancing the Canada Pension Plan (CCP), will be elected.
However, the province’s plans will not be dependent on an election with an unknown date and unknown outcome, according to Hunter.
“The fact is we currently don’t have a federal partner that is willing to talk about this issue and address it in a way that will make that difference for the people of this country,” said Hunter. “What we’re doing in Ontario is ensuring that we take action today.”