Federal, provincial and territorial finance ministers met Monday in Vancouver and crafted a plan to reform the Canada Pension Plan (CPP). The reforms will see a seven-year phase-in period starting in 2019, where employees and employers will pay more. The benefits will go up, and there will be more supports for lower income retirees. Everyone signed on the deal except for the finance ministers from Manitoba and Quebec. Quebec’s finance minister Carlos Leitao was quoted in the national media that the plan was “going too far” and would be “very costly”. When a finance minister from Quebec is complaining about the price of a plan funded by taxpayers, you know this is going to be expensive.
CPP reform was even supported by Ontario Premier Kathleen Wynne, at least in public. Ontario finance minister Charles Souza has stated that if CPP reform goes through, the Ontario Retirement Pension Plan (ORPP) will be scrapped. That is Premier Wynne’s worst case scenario.
The provincially-managed retirement plan for everyone in Ontario, except for the long list of sector and union exceptions who supported the Liberals, is Wynne’s cash cow. This is the plan that was going to help Wynne rob Peter to pay Paul. It is to fund all the infrastructure needs under the “transformative change” planned to put in place the new, green, economy of Ontario. Workers in Ontario are to have their pockets picked, authorized by the government, to invest and grow for retirement. The oversight board for this retirement fund will of course invest in Ontario-based infrastructure as a good investment. It is essentially one giant fiat-money scheme, or revenue tool, to fund Liberal plans no one can afford.
If the CPP reform plan goes through, then there is no need for the ORPP. The Wynne government will have to go back to the drawing board to fund some of their schemes. Or will it?
If the Wynne government can determine that if an issue appears with the new CPP changes after the fact, they could rescind their support. At that point the amending formula for the CPP would not be met, the changes die and Wynne’s ORPP stays.
Even if the CPP changes go through, there is nothing to force Wynne to rescind the ORPP. The ORPP is provincial law, employers start enrolling on January 1, 2017. Payments into the ORPP start in 2018. The CPP changes start in 2019 and take seven long years to ramp up. That’s seven years where the ORPP can help Ontarians, by picking their pockets.
Wynne’s public support for CPP reform was an enormous gamble in a bid to help the federal Liberals achieve power. Perhaps the Premier thought that her federal cousins would break election promises as easily as her own party does? That this would be a promise never delivered on. Wrong.
For Wynne, CPP reform causes a financial headache and cuts off an important revenue tool to fund her agenda. Given the Ontario government’s track record of accountability and promise keeping, do not believe that the ORPP will go quietly into the night. Expect more doublespeak and manufactured crises to cause something to change, and for Wynne to keep the ORPP. For Wynne, she has to. It’s the only way to keep Ontario’s financial shell game going a little further on.