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Manitoba watching Ontario's plan for provincial pension program

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Ontario premier Kathleen Wynne


Ontario premier Kathleen Wynne

It’s caught the attention of Manitoba, but so far that’s about it, NDP Finance Minister Jennifer Howard says.

Ontario plans to go it alone to roll out a new provincial pension plan by 2017 – if Premier Kathleen Wynne’s Liberals stay in government. Election day in Ontario is June 12.

In its May 1 budget, the Wynne government said it would require Ontarians and their employers to contribute to a provincial pension plan by 2017 if they don’t have a comparable plan in their workplace. The plan is in response to the fact that about two-thirds of Ontario workers do not participate in workplace pension programs and that too many people are not saving enough for retirement. The plan would complement the existing national Canada Pension Plan and be meant primarily to help middle-income earners.

It was first floated late last year after the late finance minister Jim Flaherty rejected a push by some provinces, including Manitoba, to look at enhancing the CPP. Flaherty said the economic recovery was still too fragile to increase the CPP payroll tax imposed equally on workers and their employers. Ottawa also says such a measure would make the country less competitive and make it harder on business to create jobs.

Howard said Manitoba remains committed to seeing the CPP reformed regardless of the outcome of the Ontario election and fate of Wynne’s pension plan. Because of the election campaign, Manitoba officials have not discussed with their Ontario counterparts what that province’s plan might look like. Prince Edward Island has also said it’s interested in what Ontario is planning.

"That’s the best vehicle for Manitobans to see increased pensions," Howard said of the CPP. "We’ve said all along we would only do that after talking to business and employers. We would only do it in a way that would be manageable and modest."

Howard said that would only happen when the economy shows signs of being more stable.

She also said Manitoba is not in a position to develop its own pension plan because of its size.

"I don’t think it would provide (Manitobans) with enough pension security and it would likely be very costly, so we’re interested in what other provinces are doing, but our commitment is to an expanded CPP."

Earlier this week the Canadian Federation of Independent Business said in a release the Manitoba government was considering introducing a new pension payroll tax modeled after Ontario’s proposed retirement pension plan. The CFIB said that would see small business owners and employees pay up to another $1,643 taken each year in "taxes."

Howard said if and whenever the provinces and Ottawa act on CPP enhancements, it would take several years for any changes to be enacted.

"The people that would benefit from that are probably in their 30s and 40s so it as long-term situation," she said. "If we don’t act, we know that the next generation will have less money in retirement than their parents, and that I think is something that would be irresponsible if we don’t address."

Some commentators have said Ontario’s proposed plan is more an attempt to get Ottawa back to the table to talk about CPP reform.

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