TORONTO, ONTARIO--(Marketwired - June 21, 2016) - The expansion of the Canada Pension Plan (CPP) will benefit future generations of Canadians, however the modest increases and long phase-in continue to create barriers to retirement security.
"The labour movement in Ontario, and indeed across Canada, should be commended for our collective leadership in making retirement security for every working Canadian a top priority," said Ontario Federation of Labour President Chris Buckley. "Our movement has fought long and hard to ensure that governments of all stripes recognize their obligations to creating greater retirement security. Every working Canadian deserves to retire with dignity."
For the last number of years, the Province of Ontario has been one of the lone voices in government championing stronger retirement security for working people, on the federal stage. "The Ontario government should also be congratulated for its leadership role in advocating for greater security in retirement," said Buckley.
As details of the CPP enhancement emerge, what is clear is that the key features of the CPP, namely its universality and portability, will continue to be a cornerstone of the plan. Although the OFL would have liked to have seen a doubling of CPP benefits, the Federation is encouraged that a consensus was reached and that elected officials recognized that maintaining the status quo was not an option.
The agreement to raise CPP benefits to replace 33 per cent of pre-retirement earnings up to a maximum amount of $82,700 is an improvement on the current CPP replacement rate of 25 per cent of pre-retirement earnings up to a maximum of $54,900.
News of CPP enhancement signals the death of the Ontario Retirement Pension Plan (ORPP), which was scheduled to begin in 2018. The ORPP would have provided a 15 per cent replacement rate, and an upper income level of $90,000 (indexed) to the nearly 2/3 of Ontarians that currently do not have a workplace pension. Unlike the CPP, the ORPP would not have been universal in its coverage.
Buckley said that the OFL will now urge the Ontario government to move quickly to adopt the new CPP enhancement plan when the Premiers meet in July and to continue to advocate for additional CPP improvements.
For information, visit www.OFL.ca and follow the OFL on Facebook and Twitter: @OFLabour.