Ontario approves bill to create provincial pension plan 

Ontario passed legislation Wednesday to create a provincial pension plan for more than three million people who do not have a workplace pension, despite critics’ warnings it amounts to a job-killing payroll tax.

Workers will be required to contribute 1.9 per cent of their pay to the Ontario Retirement Pension Plan, to a maximum of $1,643 a year, which employers have to match for every employee.

“Over $3.5 billion will be invested in the fund each year,” said Associate Finance Minister Mitzie Hunter. “Members of the plan will be able to have an income stream for life when they retire.”

The mandatory contributions will be phased in over two years, starting with larger companies Jan. 1, 2017 before moving to smaller operations like convenience stores and dry cleaners.

Ontario wants to mirror the Canada Pension Plan as much as possible, and Hunter said the province still would prefer to enhance the CPP instead of creating its own plan. Contributions would be “locked-in” just like CPP contributions, prohibiting people from cashing them out before retirement.

However, Hunter could not say when retirees could expect to start receiving benefit payments from the provincial pension plan.

“We’re still actually developing details of the plan,” she said. “So people will be making contributions to the plan, and that’s the beginning.”

Premier Kathleen Wynne has said the province had to create its own retirement plan for the more than two-thirds of Ontario workers who don’t have a pension at work because the federal government refuses to enhance the Canada Pension Plan.