Manitoba premier cites ‘personal responsibility’ in pension plan decision

Instead, the provinces are now being asked to finalize an agreement by July 15 that will eventually increase contributions and retirement benefits through the public plan.

“We needed to have that minister in place to make it clear to the people of Ontario, and to the national discussion, that we were determined to move head on the ORPP because there was a 50-50 chance we were going to have to implement the ORPP”, she said.

The plan would start with an increase of around seven dollars per month in 2019.

Ontario chose to create its own pension plan only after the previous federal Conservative government refused to consider anything that would increase premiums paid by employers, but always considered an enhanced CPP its preferred option, added Wynne.

Under the enhanced plan, CPP will replace fully one-third of a person’s pre-retirement income (up from the current 25 per cent replacement rate) up to a maximum amount of earnings that will also rise dramatically.

Finance Minister Bill Morneau announced Monday that a majority of Canadian provinces and the federal government have agreed in principle to a modest expansion of the retirement benefits payable under the Canada Pension Plan (CPP), to be phased in over seven years, beginning on January 1, 2019.

The existing CPP requires contributions of up to C$2,544 per year, per person, from both an employee and an employer.

Ontario Premier Kathleen Wynne confirmed Tuesday that her government would scrap plans for its own pension scheme.

The silver lining of the agreement is that it likely means Ontario will not be moving ahead with its separate plan, the Ontario Retirement Pension Plan, which would have been an even worse strain on businesses of that province, the group said.

Ontario Finance Minister Charles Sousa said in an interview after the announcement that the swift agreement was driven by several factors.

For Manitoba, Morneau said the deal comes too soon for the province’s new Tory government.

They said Ottawa made a major push in the final days and hours, which helped secure enough country-wide support to expand the CPP.

“I think we have reached a balanced approach to setting the objectives that were set out”. Since 2013, we have been calling on the federal government to enhance CPP because a national solution provides many benefits to Ontarians, including portability and cost effectiveness, while providing coverage to more people.

But unlike the broader-based CPP reform agreement, he said Quebec would only raise premiums on income earned above $27,500. Canadian families can not trust the Liberals to make decisions that put more money back in their pockets.

“All of those benefits really do contribute to the success of this moment and the success of this change”, she said.