The new Liberal government will officially take office on Wednesday but will their arrival affect the much-publicized Ontario Retirement Pension Plan (ORPP)? One industry expert shares her thoughts.
“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,” says Heather Di Dio, an associate practicing with Dentons Canada’s Pension and Benefits Group.
“Now that they've won a majority government, CPP expansion is back on the table,” she continued. “This could mean higher employer and employee contributions and also higher CPP benefits for retirees.”
Di Dio says this means the ORPP could – possibly – be put on hold.
“Ontario's Premier Wynne has always stated that expanding the CPP was her first choice,” explains Di Dio, “the ORPP was a response to the federal Conservative party's refusal to do so.”
What to expect
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,” reveals Di Dio. “But don't expect the CPP to be expanded any time soon.”
According to Di Dio, changes can only be made if at least two-thirds of the provinces and two-thirds of the entire population agree to the amendments.
“It could take years to obtain this level of agreement,” she warns.
Impact on employers
“For the time being, it seems that the Ontario government will stay on course to establish the ORPP by the 2017 deadline,” says Di Dio, who also suggests it will be an easier task now, as employers can expect support from the federal government to help implement the plan.
Di Dio also suggest employers make a concerted effort to keep up with any developments.
“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,” she stressed, “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.”
to read Heather Di Dio’s full article.
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