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The Salon is ONW's weekly gathering place where three of Canada's brightest and most respected political strategists - John Capobianco , Marit Stiles and Richard Mahoney - come together to analyze national issues affecting Ontario.

Richard Mahoney:

Kathleen Wynne's proposed Ontario Retirement Pension Plan is the biggest reform in Canadian social policy in a generation. It would effectively double the pension income of Ontarians who don't already have a workplace pension plan, which is most of us. The plan would be funded by employers and workers, effectively mirroring and doubling the Canada Pension Plan.

In a perfect world, that reform would be led, as it has in the past, by the federal government, with all provinces benefiting. Premier Wynne, backed by most of the other premiers, tried hard to convince Prime Minister Harper to lead on this. But he flatly refused and subsequently attacked Wynne for proposing the idea.

So what we have, at least for the moment, is a made-in-Ontario solution that will benefit millions of our citizens. Interestingly, other provinces are free to sign on and many are considering doing so, even without federal leadership. 

John Capobianco:

Let me first off congratulate my friend, Richard, for the victory in Ontario. I haven't been able to say that to him since we were doing political panels during the election. In fact, I also had the pleasure of being on a few with Marit. Both are very smart and talented people.

That said, let me tell you why Richard is so wrong in his assessment of the pension reforms being proposed by the Premier.

The Premier ran on pensions and has gone ahead and even appointed a junior minister (Hon. Mitzie Hunter) to implement these changes, and with a majority, this will likely happen.

It will be to the detriment of taxpayers in Ontario. In the words of federal Minister Sorenson, it is "a reckless high-tax plan" and goes against what the feds are proposing.

The feds are suggesting a more targeted benefit pension plan where it suits those who don't have plans, but should. Minister Sorenson said that there are plenty of voluntary ways people can save for retirement, including Registered Retirement Savings Plans (RRSPs), Tax Free Savings Accounts (TFSAs) and the recently introduced Pooled Registered Pension Plans (PRPPs).

This is the way to go and Ottawa is being reasonable with their approach to the pension plan strategy.

Marit Stiles:

First off, I'll join John in congratulating Richard and the Liberals on their victory.

I'm not sure that the victory was won on the issue of pensions, per se, but their pension talk certainly gave the Premier/Liberal Leader a nice platform upon which to choose her sparring partner, Mr. Harper, and to sideline Mr. Hudak quite effectively.

But now the proof is in the pudding and we get to see how this plan - and their other significant budget commitments - are implemented and paid for.

The reality is that Liberal talk doesn’t match the action... or at least there's not a lot of action happening very quickly. We won’t see a public pension until 2017, and we haven’t seen any details yet of how it will work.

Meanwhile the Liberal Government is moving ahead on PRPPs which are privately administered "Stephen-Harper-approved" defined contribution pensions... and we know that privately administered plans are notorious for eating up pensions in administrative costs.

So there are many questions still to be answered and issues unresolved.

Richard Mahoney:

Thanks to John for kind words. That said, they do not excuse the federal government's complete abdication on this issue.

There is no question there is an ideological motivation behind the Conservative's approach to this.

The Conservatives opposed the Canada Pension Plan when it was introduced by a Liberal government in the 1960's, because they think people should fend for themselves, rather than having a proper pension plan funded by contributions from employers and employees. They oppose the current reforms on the same basis.

Thanks, too, to Marit, for her congratulations. I admire Marit's attempt to characterize Wynne's action as a "delay". Andrea Horwath and the NDP opposed the budget that brought in the ORPP, indeed defeated it in the Legislature, causing an election that resulted in a Liberal majority. It is precisely that kind of approach to reform that cost the NDP so dearly in public support.

The reality is this is a big change. Other provinces are at the table: Manitoba, Newfoundland and Labrador, PEI. Others are considering it.

Premier Wynne put research in front of the premiers that shows Canadians do not see increased pension protection as a tax, but rather see it as an investment. Which is what it is, and a smart one at that.

John Capobianco:

The reality is that it was Prime Minister Harper under former Finance Minister Flaherty who had the courage to let Canadians know there was a significant problem with CPP, especially as the baby boomers begin to retire. This federal government put various plans in place (an example is the phasing-in of higher retirement age) to ensure that the CPP can survive.

Also, to ensure Canadians had a pension they can retire on and for those who don't, the government expressed a number of options, as I mentioned above, available to Canadians and the provinces to ensure Canadians were not left without a pension upon retirement.

Premier Wynne, decided that putting a tax on businesses and hard working Ontarians was the right option. It was the easiest and safest option for the Premier - that doesn't make it right.

Marit Stiles:

First to Richard's earlier point, I agree that the Ontario NDP could have been clearer about their concerns and position with regard to the Premier's plans. That doesn't, however, detract from the issues now at hand, such as: How can this work best? What can be done to ensure this works most effectively for all Ontarians?

Jim Leech, the former head of Teachers' Pension, has said in his report that these private plans (referred to above) can eat up as much as a third of retirement income in fees.

The Liberals received Leech's report in March but chose to release it over the August long weekend. Telling. 

It is the role of the opposition to keep a close eye on how these plans and implementation unfold, and that's what the NDP has to do in Ontario today.

On the federal front, however, I can't miss the opportunity to point out that the federal NDP and Tom Mulcair, along with the Canadian Labour Congress, have been putting forward the very sensible proposal that government expand the CPP to replace a higher percentage of earnings - rather than come up with new schemes.

The nice thing about the CPPIB (Canada Pension Plan Investment Board) debate, promoted by labour, is that there's a successful organization already in place.

In the case of a new pension scheme, the government will really need to be smart about setting it up to prevent the private sector from influencing it in a way that maximizes their fee revenues. In other words, we need details to get comfort that this isn't just another scheme to direct people's money into the hands of brokers and bankers.

At the end of the day, we all have a massive responsibility to ensure that the hard-earned retirement pensions of Canadians are safe and secure. 

About The Salon

Richard Mahoney is a former Liberal advisor to Rt. Hon. Paul Martin; Marit Stiles is a federal and Ontario NDP strategist; and John Capobianco is a former CPC candidate and long-time party activist in both the federal and Ontario Conservative parties
Posted date : September 03, 2014

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