With a new federal Liberal government coming into office on
November 4, 2015, what does this mean for the Ontario Retirement
Pension Plan (ORPP)? That's the question on the minds of
many employers and workers in Ontario.
As part of its campaign platform, the federal Liberals promised
to work with the provinces and territories, workers, employers, and
retiree organizations to enhance the Canada Pension Plan
(CPP). Now that they've won a majority government, CPP
expansion is back on the table. This could mean higher
employer and employee contributions and also higher CPP benefits
for retirees. As a result, it's possible that the ORPP
will be put on hold. Ontario's Premier Wynne has always
stated that expanding the CPP was her first choice; the ORPP was a
response to the federal Conservative party's refusal to do
What can we expect in the coming months?
Justin Trudeau, the prime minister-designate, has committed to
begin talks with the provinces on how to improve the CPP within
three months of taking office, so it's likely that a meeting of
the federal and provincial finance ministers will be scheduled in
the near future. But don't expect the CPP to be expanded
any time soon. Consent among at least 2/3rds of
the provinces, having in the aggregate at least 2/3rds
of the population of all of the provinces, is required before any
changes can be made. It could take years to obtain this level
Prior to the election, Premier Wynne suggested that she would be
willing to drop the idea of a provincial pension plan if the
federal Liberals win. However, she recently stated that until
the federal Liberals make good on their pledge to enhance the CPP,
she would continue with her plan for the ORPP.
For the time being, it seems that the Ontario government will
stay on course to establish the ORPP by the 2017 deadline.
This will be an easier task now, as we can expect support from the
federal government to help implement the plan.
What should employers do?
All Canadian employers should be aware of, and monitor, possible
proposed changes to the CPP in order to assess the potential
impacts to its organization. In addition, employers with
Ontario employees should continue to review and assess their
retirement savings arrangements and determine whether changes
should be made, keeping in mind that the ORPP is, for now, required
to be in place by January 1, 2017.
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