Union says announced changes undermine idea of "universal" pension plan
TORONTO—Ontario’s Liberal government announced Aug. 11 that it will delay the phasing in of the Ontario Retirement Pension Plan in a way that will ease the burden on small and medium-sized businesses. The new schedule will phase large businesses into the program in 2017, medium-sized businesses in 2018 and small businesses in 2019. The government also noted businesses with a “comparable pension plan will not be required to participate in the ORPP.”
But these announced changes betray the Liberals’ promise to build a pension plan for all Ontarians and could threaten the expansion of the Canada Pension Plan, according to the Canadian Union of Public Employees Ontario.
“CUPE Ontario has always supported expanding pension coverage for all Canadians. But the changes announced today tell us the Liberal government has betrayed its promise to ensure retirement income security for the next generation,” the union’s president, Fred Hahn, said. “Instead of creating a truly universal system that could be rolled into a future CPP expansion, today’s announcement leaves even more Ontarians out.
“How will this plan ever be rolled into an expanded CPP when the majority of Ontario workers aren’t participating in it?” he added.
CUPE pointed to the government’s comparable workplace pension plan exception, which is defined as a contribution plan with combined employee and employer contributions of at least 8 percent, as particularly troubling.
“Defined contribution plans, like RRSPs, have higher financial services fees, leave workers vulnerable to the whims of the markets and provide substantially less retirement income security,” Hahn said. “Ontarians who only have this type of plan need access to an expanded, defined benefit, public pension plan like the CPP. By leaving them out of the ORPP, Wynne is setting a dangerous precedent during this federal election.”
“Today’s announcement by the Ontario Liberals also postpones pension coverage for many low-waged workers, without any workplace pension whatsoever, who work in small- and medium-sized businesses. These are exactly the type of workers who need expanded public pensions, but the Premier is postponing their access,” Hahn added.
CUPE Ontario said it believes the best way to enhance retirement security is through a truly universal, defined-benefit plan such as the Canada Pension Plan. With this in mind, the union called on the Wynne government to delay further development of the ORPP until after the October federal election.
The ORPP, controversial among businesses and workers from its introduction, has now reached a national stage. As the federal election ramps up, federal and provincial leaders continue to share blows over the best way to protect Canadians’ and Ontarians’ financial future.