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

During its announcement of the 2016 Ontario Budget on Feb. 25, the provincial government said it’s on track to ensure that, by 2020, all eligible Ontario employees will be covered by a comparable workplace pension plan or the ORPP.

While elements of the ORPP’s design were announced in January 2016, the government said it will outline further details in legislation to be introduced in spring 2016. This legislation will focus on employer eligibility, benefit calculations, and the compliance and enforcement regime.

The budget document said that comparable defined benefit plans must be equal to or exceed the benefits being offered through the ORPP. “For this reason, comparable DB plans in Ontario must meet a minimum benefit accrual rate of 0.50%,” the government said.

Read: ORPP design and feature details announced

Following a great deal of pushback from the industry, Ontario Finance Minister Charles Sousa announced on Feb. 16 that the province would be delaying the ORPP by one year. Large employers will still have to register with the ORPP as of Jan. 1, 2017, but won’t have to start remitting premiums until Jan. 1, 2018.

“Based on feedback from the industry and to ensure a successful and smooth implementation, the ORPP Administration Corporation would launch the employer verification and enrolment process in 2017, with employer and employee contribution collection beginning in 2018,” said the budget on Feb. 25. “This decision supports national discussions on a CPP enhancement and facilitates transition to the ORPP.”

Ian Edelist, principal and Toronto practice leader at Eckler, said he thinks the delay is  good idea but doesn’t fathom that the government will put the brakes on completely. “It says its goal is to join into an enhanced CPP, but I don’t see that happening.

“I think momentum and the amount of money that its probably invested creating the structures and doing the work that its done … I just can’t see it cancelling the ORPP. As much as it makes sense for it not to do it and to be part of the CPP, I think momentum is going to make it go ahead no matter what happens.”

Read: ORPP delay a ‘wise’ move

The ORPP Administration Corporation has been established and the process to register the plan with the Canada Revenue Agency is well underway, said the government. In January 2016, it recruited Saäd Rafi as the first CEO of the Administration Corporation.

Immediate priorities, according to the government, include engaging employers on the verification and enrolment processes to ensure a seamless transition, and overseeing the set-up of infrastructure and technology requirements to administer the plan.

The budget also said that the government intends to introduce an amendment to the ORPP Administration Corporation Act, 2015, that, if passed, would enable the Administration Corporation to adopt any pre-incorporation contracts made on its behalf within one year of its establishment.

Read: ORPP AC appoints first CEO

The budget also included the updated implementation timelines for the roll-out of the ORPP.


ORPP Phase-In and Contribution Schedule
(Employer contribution rates below would be matched by eligible employees)
Enrolment of employers in the ORPP would begin on January 1, 2017
Type of EmployerJan. 1, 2018Jan. 1, 2019Jan. 1, 2020Jan. 1, 2021
Wave 1: Large employers without registered workplace pension plans0.8%1.6%1.9%1.9%
Wave 2: Medium employers without registered workplace pension plans0.8%1.6%1.9%1.9%
Wave 3: Small employers without registered workplace pension plans0%0.8%1.6%1.9%
Wave 4: Employers with registered pension plans that either do not meet the comparability test or do not cover all classes of employees0%0%1.9%1.9%


“The province heard from the business community that it needed additional time,” said the government. “The government has responded to this and will provide employers affected by the ORPP with more time to make the technical changes required. The province is committed to supporting a smooth and successful implementation of the ORPP. The additional time will also enable national discussions on CPP enhancement to proceed.”

Read: CPP to be expanded within the year

To evaluate and report on plan sustainability and prepare funding valuations, the government has also proposed in its 2016 budget to establish an independent provincial Office of the Chief Actuary (OCA) by legislation in 2016. “Modelled on the Office of the Chief Actuary of Canada, Ontario’s Chief Actuary would provide the province and the Administration Corporation with impartial and expert actuarial advice and guidance. All valuations would be peer-reviewed and made public,” said the government.

Moving forward, Ontario intends to continue to seek advice through ongoing discussions with stakeholders.

Read: ORPP will deliver a serious dose of pension awareness