On December 8, 2014, the Ontario Government introduced Bill 56,
Ontario Retirement Pension Plan Act. Bill 56 sets out the
parameters for the Ontario Retirement Pension Plan (ORPP). If Bill
56 receives Royal Assent in the future, which is expected, almost
all employers that have employees in Ontario will be impacted.
The ORPP is a mandatory provincial pension plan. Some of the
parameters of the ORPP that are in the first version of Bill 56 are
Contributions to the ORPP will be made by eligible employers
and eligible employees. A person who participates in a
"comparable" workplace pension plan is not an
"eligible employee" (i.e. contributions do not have to be
made to the ORPP with respect to such persons), but the legislation
has not yet defined what constitutes a comparable workplace pension
Contributions will be determined by applying the
"applicable contribution rate" (which will be the same
for eligible employers and eligible employees but will not exceed
3.8 percent combined) to the portion of the eligible employee's
annual salary and wages between the minimum and maximum thresholds.
The maximum threshold for 2017 will be $90,000 adjusted in
accordance with legislation.
Normally, retirement benefits under the ORPP will be paid for
the life of a plan member beginning at age 65, but such benefits
may begin to be paid as early as 60 years of age or as late as 70
years of age as long as they are actuarially adjusted. Retirement
benefits under the ORPP will be indexed to inflation.
Bill 56 sets a deadline of January 1, 2017 for the Ontario
Government to establish the ORPP. In the meantime, the Ontario
Government has released a consultation paper entitled Ontario
Retirement Pension Plan: Key Design Questions. Three key policy
areas are addressed in the consultation paper:
What constitutes a "comparable" workplace pension
plan? The Ontario Government has indicated that its preferred
approach is to define comparable workplace pension plan as a
defined benefit or target benefit multiemployer pension plans. This
would mean that defined contribution pension plans, pooled
registered pension plans, and group registered retirement savings
plans would not be a "comparable" workplace pension plan.
The Ontario Government has asked the following question, among
others: in your view, what would be the best definition of
"comparable" workplace pension plans?
What is the right minimum earnings threshold? The 2014 Ontario
Budget indicated that earnings below a certain threshold would be
exempt from contributions, to reduce the burden on lower-income
workers. One question the Ontario Government has asked is how
different employers will be affected if the minimum earnings
threshold is different than that of the Canada Pension Plan.
How to best assist self-employed individuals? One question the
Ontario Government has asked is whether Ontario should engage in
discussions with the Government of Canada to amend the Income
Tax Act rules to allow the selfemployed to participate in the
The Ontario Government has provided all parties (including
employers) until February 13, 2015 to make
submissions on the consultation paper and the ORPP initiative. All
types of businesses, including small and medium-sized business, may
wish to make submissions to ensure that their voices are heard.
Members of our Pension and Benefits Group would be pleased to
assist your business in making submissions to the Ontario
Government on the wide-impacting ORPP legislation and the
On a related note, on December 8, 2014, the Ontario Government
also introduced Bill 57, Pooled Retirement Pension Plans Act,
2014 (PRPP Act). Ontario's proposed PRPP Act incorporates
many features of the federal Pooled Registered Pension Plans
Act, including voluntary participation and contributions by
employers, automatic enrolment of employees, locked-in
contributions and low cost, but has a few Ontariospecific features
where appropriate. We will continue to monitor developments with
respect to Bill 57.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).