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it a "payroll tax," which explains, in part, their refusal to reform the Canada Pension Plan so it's not capped at an out-of-date and unreasonably low limit.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.