Kathleen Wynne says full-steam ahead with Ontario pension plan

[mentalfloss]

Kathleen Wynne says full-steam ahead with Ontario pension plan

Ontario is forging ahead with its own provincial pension plan regardless of whether there is “a change of heart” — or government — in Ottawa, says Premier Kathleen Wynne.

With Prime Minister Stephen Harper’s refusal to enhance Canada Pension Plan benefits, Wynne said the new Ontario Retirement Pension Plan must be implemented.

“If we don’t get going right now we won’t be ready in 2017. We’re designing this plan so that it is consistent with the CPP,” she told reporters Thursday at Queen’s Park.

Asked what would happen if either NDP Leader Thomas Mulcair or Liberal Leader Justin Trudeau succeeds Harper in next year’s federal vote, Wynne refused to be drawn into a “hypothetical” scenario.

“We are not going to wait until the federal election to move ahead. We must move ahead,” the premier said.

“If there’s a change of heart or of government federally we may be able to have another discussion, but we’re not going to wait — we’re starting today, we’re starting right away to work to implement the new Ontario Retirement Pension Plan.”

Wynne made her comments flanked by Finance Minister Charles Sousa and her newly appointed Associate Minister of Finance Responsible for the Ontario Retirement Pension Plan Mitzie Hunter.

The three politicians had just finished a roundtable meeting in the cabinet chamber with the government’s technical advisory group on retirement security.

The new plan would mean an additional $788 deduction from the annual salary of someone earning $45,000, which critics claim is a payroll tax while proponents argue it’s a forced savings.

With only about one-third of Ontario workers covered by an employers’ pension plan, Wynne made the new public scheme a cornerstone of the Liberals’ successful re-election on June 12.

Sousa announced the pension plan in the May 1 budget that triggered the recent election. He will re-introduce the same spending plan on July 14.

http://m.thestar.com/#/article/news...ullsteam_ahead_with_ontario_pension_plan.html

 

[Walter]

More bureaucracy to steal more of my $.

 

[mentalfloss]

Unless you already have a pension plan.

 

[taxslave]

I can forsee lots of problems with a provincial pension program like when people move to another province to work, creating a whole new bureaucracy to duplicate an existing federal plan etc.

 

[mentalfloss]

I think it's important to note a possible side benefit to this is financial accountability. A lot of self employed individuals like to cheat on their taxes and this would make certain they are correctly reporting their income.

 

[IdRatherBeSkiing]

I think it's important to note a possible side benefit to this is financial accountability. A lot of self employed individuals like to cheat on their taxes and this would make certain they are correctly reporting their income.

So they can be taxed more? I suspect more income will go unreported.

Unless you already have a pension plan.

What type of plan qualifies?

 

[mentalfloss]

So they can be taxed more? I suspect more income will go unreported.

It's getting harder and harder to deal exclusively in cash so if they want to avoid doing their taxes and risk avoiding a refund or getting audited, then they are playing with fire.

What type of plan qualifies?

You can be excluded if you already have a private pension plan.

 

[mentalfloss]

Why we need an Ontario pension plan

Ontario has something like six million workers. And nearly half of them don't have pension plans.

That's right. Three million Ontarians are looking at retirement years where their only income will be the Canada Pension Plan which pays a maximum of $1,038 monthly. (The majority of Canadians don't receive the maximum — the average payout is a little more than $550 monthly.) Add to that Old Age Security benefits (which now don't kick in until age 67) of about $550 monthly. All in, that's less than $1,600 monthly.

Considering today's cost of living, never mind what that will be in five or 10 years, that's not enough. And that's why the Ontario government announced the Ontario Retirement Pension Plan in the budget defeated by the Conservatives and the NDP, and why the Wynne government needs to get to work on the plan sooner rather than later.

The ORPP is aimed at people earning up to $90,000 who don't already have a workplace pension plan. For someone earning the maximum, the ORPP would deduct about $133 monthly (someone earning $45,000 would pay out $66 monthly). Employers would match that contribution.

What would the ORPP do? It would add approximately $535 a month to the income of someone receiving CPP only. Add that to the $1,600 and you get $2,135 monthly income ($25,620 annually), still not robust but at least above the poverty line, approximately $20,000 income yearly.

Not everyone likes this idea.

The Canadian Independent Federation of Business says employers can't afford it. Critics, including the Harper government, call it a "payroll tax," which explains, in part, their refusal to reform the Canada Pension Plan so it's not capped at an out-of-date and unreasonably low limit.

But Ontario is not alone in being concerned. Prince Edward Island and Manitoba have joined the body designing the program. Alberta, British Columbia, Newfoundland, Northwest Territories and Nunavut are in negotiations with Ontario to do the same. What are the chances that all these provinces are wrong and the Harper government is right?

This is not just about improving the lots of thousands of retirees who haven't saved enough for their later life. Seniors who live on or below the poverty line are more likely to be frail or in ill health. They are less likely to live proactive, healthy lives and stay independent. They are more likely to have a poor diet. All those factors have a systemic impact on the health care and social services safety net, both of which are already strained by an aging population.

In a perfect world, the federal government would be a lead partner, but it's not at the table. So provinces like Ontario have little choice but to act independently.

The Spectator's view: Why we need an Ontario pension plan

 

[taxslave]

I think it's important to note a possible side benefit to this is financial accountability. A lot of self employed individuals like to cheat on their taxes and this would make certain they are correctly reporting their income.

Define cheating.

Why we need an Ontario pension plan

Ontario has something like six million workers. And nearly half of them don't have pension plans.

That's right. Three million Ontarians are looking at retirement years where their only income will be the Canada Pension Plan which pays a maximum of $1,038 monthly. (The majority of Canadians don't receive the maximum — the average payout is a little more than $550 monthly.) Add to that Old Age Security benefits (which now don't kick in until age 67) of about $550 monthly. All in, that's less than $1,600 monthly.

Considering today's cost of living, never mind what that will be in five or 10 years, that's not enough. And that's why the Ontario government announced the Ontario Retirement Pension Plan in the budget defeated by the Conservatives and the NDP, and why the Wynne government needs to get to work on the plan sooner rather than later.

The ORPP is aimed at people earning up to $90,000 who don't already have a workplace pension plan. For someone earning the maximum, the ORPP would deduct about $133 monthly (someone earning $45,000 would pay out $66 monthly). Employers would match that contribution.

What would the ORPP do? It would add approximately $535 a month to the income of someone receiving CPP only. Add that to the $1,600 and you get $2,135 monthly income ($25,620 annually), still not robust but at least above the poverty line, approximately $20,000 income yearly.

Not everyone likes this idea.

The Canadian Independent Federation of Business says employers can't afford it. Critics, including the Harper government, call it a "payroll tax," which explains, in part, their refusal to reform the Canada Pension Plan so it's not capped at an out-of-date and unreasonably low limit.

But Ontario is not alone in being concerned. Prince Edward Island and Manitoba have joined the body designing the program. Alberta, British Columbia, Newfoundland, Northwest Territories and Nunavut are in negotiations with Ontario to do the same. What are the chances that all these provinces are wrong and the Harper government is right?

This is not just about improving the lots of thousands of retirees who haven't saved enough for their later life. Seniors who live on or below the poverty line are more likely to be frail or in ill health. They are less likely to live proactive, healthy lives and stay independent. They are more likely to have a poor diet. All those factors have a systemic impact on the health care and social services safety net, both of which are already strained by an aging population.

In a perfect world, the federal government would be a lead partner, but it's not at the table. So provinces like Ontario have little choice but to act independently.

The Spectator's view: Why we need an Ontario pension plan

That is not a very good ROI for fourty years of work and contributions. You would do much better puting that $133 in the bank. Of courseknowing how governments operate the chosen will get to collect a soon as the program starts depending on thier grandchildren to carry the load.

 

[SLM]

I think it's important to note a possible side benefit to this is financial accountability. A lot of self employed individuals like to cheat on their taxes and this would make certain they are correctly reporting their income.

How exactly is it going to do that?

 

[lone wolf]

How exactly is it going to do that?

I'm wondering the same thing. I know a few self-employed people who do quite well on barter. Gov't still hasn't found a way to muscle in on that

 

[SLM]

I'm wondering the same thing. I know a few self-employed people who do quite well on barter. Gov't still hasn't found a way to muscle in on that

Beyond that, I'm wondering just what is so different about this that will make income reporting for self-employed individuals any different than it currently is. Everything I'm reading suggests it will be handled the same as CPP is now.

Either there is lack of knowledge on how self-employed individuals report income or there is something massively different about how this plan will be implemented that is eluding every Google search I've done.

Further still most self-employed individuals don't actually prepare their own taxes, as this is the point where returns can begin to get complicated. They'll at least take it to H&R Block if not an accountant.

 

[IdRatherBeSkiing]

Define cheating.



That is not a very good ROI for fourty years of work and contributions. You would do much better puting that $133 in the bank. Of courseknowing how governments operate the chosen will get to collect a soon as the program starts depending on thier grandchildren to carry the load.

Well, knowing how governments work I also suspect the program will be cancelled before you collect a dime from it. Money in it used to reduce the size of that years deficit. Just another tax.

 

[lone wolf]

Well, knowing how governments work I also suspect the program will be cancelled before you collect a dime from it. Money in it used to reduce the size of that years deficit. Just another tax.

I thought that's what Hydro One and its cheat-me billing was doing

 

[IdRatherBeSkiing]

I thought that's what Hydro One and its cheat-me billing was doing

I guess a government can never have too many forms of tax ... I mean revenue.

 

[petros]

If this is going to be set up like Sask Pension Plan which pays buttlodes and plenty of choices including P3 mutuals, risky venture or flow throughs it might be a good thing.

SPP did 15.77% last year...

 

[SLM]

If this is going to be set up like Sask Pension Plan which pays buttlodes and plenty of choices including P3 mutuals, risky venture or flow throughs it might be a good thing.

SPP did 15.77% last year...

Have you seen the way this government manages money?

 

[Nuggler]

Have you seen the way this government manages money?

Yup; so far I'm not impressed.

Still wondering how much McLiar made out of the Hydro gas plant cancellations. Cost the bunchovus bout a billiion.

We ain't nevah gonna know.

 

[petros]

Have you seen the way this government manages money?

True enough.

 

[SLM]

True enough.

You know, I could accept paying a tax or having some other deduction from my paycheque to be used for the betterment of all of us, if the money was managed in a somewhat efficient manner. But the government isn't a money manager, they're just partisan players, and we just flip between one party and another and another and back again, and so on.