New ORPP bill includes option for other provinces to join in

A new bill for the Ontario Retirement Pension Plan introduced today will also include an option for other provinces to join in as Ontario moves ahead with the ORPP while leaving the door open to enhancing the Canada Pension Plan.

“We are continuing our conversations about CPP enhancement, but we do know those conversations take time,” said Associate Minister of Finance Mitzie Hunter during a press conference this morning. “We have provided for in the legislation that will be tabled later today the opportunity for other provinces to join.”

Finance Minister Charles Sousa reiterated the two-track strategy at the press conference this morning.

“We’re going down both tracks at this point because we don’t want to delay what’s critical, which is try to find a solution for Ontario workers who don’t have a pension plan,” he said.

Sousa added he would be meeting with his counterparts in other provinces this June to discuss solutions for a national retirement plan. From earlier meetings, he said the Atlantic provinces, British Columbia and Quebec seem to be receptive with Saskatchewan showing less enthusiasm.

Read: Ontario Budget: The ORPP pushes ahead, more details to come in spring

As the province moves forward with legislation, one of the key questions around the ORPP has been whether or not federally-regulated organizations, such as banks, would have to enrol their employees into the plan.

“We are not able at this stage to enrol federally regulated employees,” said Hunter. “However, we have made provision in this legislation that at a future date, should that change, that they’ll be able to be enrolled down the road. It’s something that we’re aware of. We’re working with [the Department of Finance Canada] and the [Canada Revenue Agency] to make those requests known.”

The proposed act describes eligible employees as someone employed in Ontario “if they report to work, full- or part-time, at an employer’s establishment in Ontario.”

On that issue, the Canadian Bankers Association noted in a statement recently that the province has put forward a proposal to the federal government to extend the ORPP to federally-regulated industries. “While it is unclear at this point how the federal government views the proposal, it raises a number of significant jurisdictional and operational issues that the CBA is currently discussing with our members,” said the CBA.

Read: Trucking industry’s ORPP concerns ‘laid to rest’

The government said the act would also establish the ORPP Administration Corporation’s compliance and enforcement framework, which would include permitting it to administer fines. Employers that fail to deduct or remit contributions would also be charge interest in late payments.

It would also establish a formal funding policy to guide the actions of the administration corporation and the government in the event of a funding shortfall or excess.

“This corporation will hold contributions in trust for the benefit of the members of the plan,” said Hunter. “They will not form part of government revenues and the government will not determine where or how contributions are invested.”

Read: 44% approve of the ORPP: poll

The ORPP Act, if passed, would:

  • Provide workers with a predictable stream of income in retirement, paid for life;
  • Begin enrolment for employers starting on Jan. 1, 2017, with contributions beginning in waves on Jan. 1, 2018. Small employers can begin contributions in Jan. 1, 2019;
  • Ensure employers and employees have the information and the time they need to prepare for implementation;
  • Enshrine in legislation the plan design details, including participation, contributions, benefit types and plan sustainability; and
  • Hold contributions in trust for plan members that will not form part of government revenues.

The government said it would continue to formalize additional plan design details in regulations expected this summer and in future legislation.

Read: ORPP design and feature details announced