Ontario Premier Kathleen Wynne says the first conversation she wants to have with Justin Trudeau once he’s sworn in as prime minister will be about enhancing the CPP.
Wynne says her Liberal government will proceed with mandatory payroll deductions starting Jan. 1, 2017 for the new Ontario Retirement Pension Plan, which essentially mirrors the CPP for anyone who doesn’t already have a workplace pension.
Read: Businesses scared of ORPP’s economic impact
Outgoing Prime Minister Stephen Harper called the provincial pension a job killing payroll tax, and said he was “delighted” to block any federal assistance to set up or administer the Ontario plan.
Wynne says she doesn’t expect that kind of attitude from a Trudeau government, and in fact hopes the new prime minister can help persuade other provinces to agree to increase deductions and benefits under the CPP.
She says it’ll take a while to get other provinces on side with enhancing the CPP, but if there is such an agreement, Ontario wouldn’t need to create its own pension.
But in the meantime, the province will proceed as if it has to set up and administer its own pension without any federal help, even though it could spend millions of dollars on an effort that could ultimately be scrapped.
Read: What you need to know about the ORPP
“We are going to continue to implement the ORPP until we know that there is a plan to enhance the CPP that will deal with the issue of the majority of people in the province not having a workplace pension plan, and the adequacy of their retirement security,” Wynne told The Canadian Press. “Those are the two issues that need to be dealt with, and it will take time.”
Wynne also wants Trudeau to agree to let the Canada Revenue Agency help Ontario administer its new provincial pension plan until there is a deal on the CPP.
“That’s going to be the first conversation I have with the prime minister,” she said.
It will save the Ontario government money and help businesses adjust to the provincial pension plan much more quickly if Ottawa helps with administration, added Wynne.
“I think in the short term the prime minister and I will be able to come to some agreement about the federal government helping us with the implementation,” she said. “We have a federal government now that understands they want to work with the province.”
The Ontario Retirement Pension Plan will require mandatory contributions from employers and workers at any company that does not already offer a workplace pension. Companies will have to pay premiums of 1.9 per cent for each employee, up to $1,643 a year, and the workers would pay an equal amount.
The plan will be phased-in, starting Jan. 1, 2017 for companies with 500 or more workers, expanding to companies with 50-to-499 workers in 2018 and to employers with fewer than 50 workers in 2019.
Read: B.C. finally gets its new Pension Benefits Standards Act
Business groups including the Chamber of Commerce say the economic impact of the provincial pension plan could prompt small employers to reduce their payroll or hire fewer workers.