OTTAWA ; The federal Conservatives unwillingness to work with the provinces to find ways to enhance the retirement security of Canadians has been a disappointment, says Ontarios premier.
Were very disappointed with the federal government in its unilateral decision to shut down discussions on enhancing the Canada Pension Plan, Kathleen Wynne said Monday during part of her one-day visit to Ottawa.
Many people, particularly middle-income earners, are not saving enough to retire, she said, and many seniors who want to retire cannot because they dont have enough savings to do so. Seniors are going back to work because they cant live on their current plan.
The Ontario government is preparing legislation to establish an Ontario pension plan. It will likely be a key element in the Liberals campaign platform during an election, which is widely expected this spring. Specifics of the plan remain unknown, but media reports suggest it could be a defined contribution plan operated by a non-profit agency at arms length from the provincial government, something similar, perhaps, to Britains National Employment Savings Trust.
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The idea of a provincial pension system emerged following the federal Conservatives decision late last year not to expand Canada Pension Plan benefits. The federal government maintains that with the economy so uncertain, it would be folly to impose more financial burdens on companies and employees by requiring them to pay more into a pension scheme.
However, last week Wynnes pension-enhancement plans got a boost when the governments of Prince Edward Island and Manitoba joined with Ontario to consider ways to create a pension plan that would supplement the Canada Pension Plan by providing extra benefits to retirees. Civil servants from these provinces are to work with their Ontario counterparts as part of an advisory panel of pension experts to draw up the specifics.
While the province would prefer to work with a strong, fair and reliable federal partner to improve Canadas pension system, the unwillingness of the Conservative government to be that partner has prompted her government to move forward with its own plan, the premier said.
Ontarios plans appear to have the support of the Canadian Association of Retired Persons. Janet Gray, chairwoman of the associations Ottawa chapter, was at Wynnes side at Mondays event, saying that CARP welcomes Ontarios leadership to strengthen retirement security for Ontarians.
Gray pointed out that 12 million working Canadians dont have workplace pension plans, and private retirement savings plans have not been an adequate response to retirement insecurity. In 2011, for example, Canadians contributed $34.4 billion to RRSPs, but that amounted to only 4.5 per cent of the total available income eligible to taxpayers. In effect, Canadians left about $738 billion of RRSP contribution room untouched.
Echoing the premier, Gray warned that if nothing is done to encourage greater retirement saving, many Canadians will be financially unprepared and may experience significant drops in their standard of living in retirement.
Wynne concluded her speech suggesting the Tories are being short-sighted. Enhancing the Canada Pension Plan should be regarded as an investment, she said. Improving retirement income security is part of the broader plan we have at creating jobs for today and investing in jobs for tomorrow.
Ontarians, Wynne said, havent been given the incentive to save, and havent been given a framework within which to save. She noted that only 35 per cent of Ontario workers have a job-based pension plan, and in the private sector only 28 per cent of workers have pension plans.
This is about giving people the tools to invest in their future.