The Ontario Legislature Thursday passed the province's 2014-'15 budget, which sets off the process of creating a provincial pension plan to supplement the C$219.1 billion (US$203.3 billion) Canada Pension Plan, Ottawa.
An original budget proposed May 1 that contained the supplement plan proposal was thrown out when Ontario Premier Kathleen Wynne dissolved the government, fearing her current minority Liberal Party government would lose a confidence vote on the overall budget. Ms. Wynne's Liberals retained control of the government in June 12 elections, and the budget was reintroduced July 14.
The supplemental plan proposal approved in the latest budget is identical to the one announced in May, said Scott Blodgett, Ontario finance ministry spokesman.
According to the Ontario Finance Ministry's proposal, the Ontario Retirement Pension Plan would supplement pension coverage to 3 million people in Ontario who now rely on the Canada Pension Plan, along with social security and personal savings for retirement.
The ORPP would pool longevity and investment risk, index benefits to inflation similar to the CPP, and require equal employer and employee contributions of up to 1.9% of pay each up to an annual threshold of C$90,000. The maximum earnings threshold would rise each year, consistent with increases to those of the CPP.
Other details, including tax ramifications, investment policy and governance, must still be worked out by a government-appointed panel led by Mitzie Hunter, a member of the Ontario Parliament. Ms. Hunter was associate minister of finance June 24. The new Cabinet-level position is responsible for the creation of the plan.
Members of the panel include Jim Keohane, president and CEO of the C$51.6 billion Healthcare of Ontario Pension Plan, Toronto; Keith Ambachtsheer, director emeritus of the Rotman International Centre for Pension Management; and Paul Martin, former Canadian prime minister. Also on the commission are representatives of the provinces of Alberta, Manitoba, British Columbia, Prince Edward Island and the territory of Nunavut.
Plans call for the ORPP to be operational by 2017.