Toronto

CPP deal means Ontario scrapping pension plan proposal, Charles Sousa says

'It was a good day today,' Ontario's finance minister says

June 21, 2016

Ontario Finance Minister Charles Sousa, right, and Federal Finance Minister Bill Morneau were part of the negotiations in Vancouver to create an enhanced Canada Pension Plan. Only Quebec and Manitoba have not agreed to the deal. (Chris Young/Canadian Press)

The Kathleen Wynne government is scrapping its plan to create an Ontario Retirement Pension Plan (ORPP), now that most of the provinces and Ottawa have made a deal to enhance the Canada Pension Plan, provincial Finance Minister Charles Sousa says.

Sousa, in a phone interview from Vancouver, said his government is pleased with the deal that was reached at the meeting of finance ministers there over the weekend, culminating with the announcement Monday evening.

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"It was a good day today," Sousa told CBC News Toronto. "We have the numbers to make it work ... and that means the ORPP will not proceed after it's all said and done," he said.

Sousa said he expects to be able to put an end to the process of setting up the ORPP officially before the Council of the Federation meeting, which begins July 15. That's when the new CPP plan will be finalized.  

"We put forward a plan for CPP enhancement graduated to 2024. We've agreed to extend that to 2025," Sousa said. 

Under the agreement, which would go into effect in 2019, an average Canadian worker earning about $55,000 will pay an additional $7 a month in 2019. That would increase to $34 a month by 2023.

Once the plan is fully implemented, the maximum annual benefits will increase by about one-third to $17,478.

Sousa said one of the main advantages of the new CPP is that it will cover all of Canada and its benefits would be portable from province-to-province. He said the ORPP would only have applied to workers in Ontario who did not have workplace pensions, and it would not have carried over to other parts of the country if a worker moved out of the province.

"The Canada Pension Plan applies to everybody," Sousa said. "So that's more positive."  

The Ontario government, along with other provinces, has been pushing for an enhanced CPP since 2013, saying that middle-class Canadians are not saving enough for retirement. But the Conservative government of prime minister Stephen Harper did not want to discuss the idea.

That lack of co-operation from Ottawa prompted Wynne to promise the ORPP, but she emphasized Ontario would abandon that plan if a deal to enhance the CPP could be reached.

Sousa says the much more positive attitude of Prime Minister Justin Trudeau's Liberal government was instrumental in getting an agreement.

"It wasn't easy. We had a lot of deliberations ... a lot of discussions," Sousa said of the negotiations with his federal, provincial and territorial counterparts in Vancouver. "But it was positive. It was encouraging."

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