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June 21, 2016

Ministry of Finance

Charles Sousa, Ontario Minister of Finance, and Indira Naidoo-Harris, Associate Minister of Finance, have issued the following statement in response to the agreement in principle on Canada Pension Plan (CPP) enhancement at the Federal-Provincial-Territorial Finance Ministers' Meeting in Vancouver:

There is an emerging retirement income challenge in Canada, and in Ontario. Workplace pensions are becoming less common and less adequate. Two-thirds of Ontario workers don't have access to a workplace pension plan, and only one in four younger workers -- aged 25 to 34 -- participate in a workplace pension plan.  Too many Ontarians are starting to approach retirement without the pension and savings they need.

Our government ran on and won a majority mandate on a promise to enhance retirement income security for the people of Ontario. Today has seen a national agreement in principle to enhance the CPP that meets our commitment to hard-working Ontarians.

Ontario has always favoured a national solution to strengthening retirement security. Since 2013, we have been calling on the federal government to enhance CPP because a national solution provides many benefits to Ontarians, including portability and cost effectiveness, while providing coverage to more people.

In the absence of a willing or collaborative federal partner at that time, Ontario began establishing the Ontario Retirement Pension Plan (ORPP).

Ontario's extensive consultations in developing the ORPP determined that to meet Ontarians' retirement needs, CPP enhancement would have to be timely and provide a level of adequacy and coverage that reflects the design of the ORPP.

We are very pleased to have reached an agreement in principle to expand the Canada Pension Plan today. Without Ontario's continued leadership and strong support for improved retirement security, there would be no resolution today. Ontario will continue to be a leader as we take the necessary steps to formalize this national agreement. This is yet another example of the progress that can be made when we work together, and we look forward to more opportunities to collaborate with our federal, provincial and territorial counterparts in the future. 



Health outcomes and personal choice collide

March 4, 2016

By: Kathleen O'Keefe

A Quebec employer recently boasted about its unconventional hiring policy – the company has never hired a “smoker” in its 30 years as a business, and its proud of this stance. News like this is mildly shocking in Canada, where the idea of health outcomes, personal choices and hiring practices have little correlation to one another.

The truth is this scenario may be a harbinger of things to come.

In the United States, with its strong sense of individuality, the very notion of personal choice and healthcare are closely tied to one another. Take, for example, U.S. pharmacy chain CVS’s controversial move in 2013, demanding that all employees involved in its healthcare plans turn over personal statistics on weight, body fat and other health information or pay a penalty.

The drive behind this directive? Pure cost reduction of course, as CVS defended its policy by saying “[our] benefits program is evolving to help our colleagues take more responsibility for improving their health and managing health-associated costs…”

Vilified as it was, CVS is not the only employer implementing these types of stipulations for its wellness programs. Almost 35% of U.S.-based employers have some form of wellness criteria that employees must meet in order to receive full benefits under their company-sponsored health plan.

Major organizations all over the U.S. have taken very serious steps to manage the high price of healthcare associated with unhealthy lifestyle choices. In fact, as a part of “Obamacare’s” Affordable Care Act, 2014, employers can actually charge an extra 30% of the total cost (employer and employee portions) of individual or family health benefits coverage under a section called Wellness Exception to HIPAA Nondiscrimination Provisions, which “allows premium discounts or rebates or modification to otherwise applicable cost sharing (including copayments, deductibles or coinsurance) in return for adherence to certain programs of health promotion and disease prevention.”

The takeaway here should not be the wiping of our collective brows in relief that it’s not happening in Canada, but instead, how will we be prepared when it does? Although legal experts may not be wrong in labeling the Quebec employer’s “non-smoker” hiring practices discriminatory, at its core, it’s about personal choice, preventable diseases and the higher health costs associated with treatment.

In Canada, the cost to employers of private insurance plans is still masked by our provincial healthcare systems. The small cost of maintenance drugs for disease states, such as cholesterol, high blood pressure and even type 2 diabetes, hides the real issue: rates of preventable disease are on the rise, and are increasing at a frightening trajectory.

The cost is not simply for drugs. Cardiovascular disease had a total spend in 2014 of more than $20.9 billion on physician’s services, hospital costs, lost wages and decreased productivity. And one of the fastest growing preventable diseases, type 2 diabetes, is estimated to have cost Canadians $6 billion in 2015 and accounts for 30% of heart attacks, 30% of strokes, 50% of kidney failure, according to a report by the Canadian Diabetes Association.

So, in a private-payer scenario, who should assume responsibility for these escalating costs? There are really only two options: employers or employees.

Employers are quickly realizing the lasting impact of chronic diseases, not only in the increased premiums of their benefits plan, but to their bottom line through lost productivity. And employees are becoming more aware of increased costs through higher coinsurance, deductibles and drug maximums, as their organizations try to reduce the overall spend on the benefits plan. The outcome is that neither group is satisfied, but the options today are limited, unless we want to challenge the very Canadian notion of universal access to healthcare.

Fortunately for Canadians, much of the premiums paid by employers in the U.S. are covered by our provincial healthcare systems, and because of this it seems to shift the discussion away from these increasingly worrying trends, but that conversation may not be far off.

It is simply a matter of time before the combination of our aging population, escalating costs of our health infrastructure and decreasing tax base brings this issue to the forefront of the employee benefits marketplace.


Province Completes Design of the Ontario Retirement Pension Plan

Ontario Takes the Next Step Towards Strengthened Retirement Income Security

January 26, 2016 12:30 P.M.

Office of the Premier

Ontario has announced new decisions on the proposed design of the Ontario Retirement Pension Plan (ORPP) -- another step in delivering on its commitment to strengthen retirement income security for the two-thirds of Ontario workers without a secure workplace pension plan.

Premier Kathleen Wynne joined Minister of Finance Charles Sousa and Associate Minister of Finance Mitzie Hunter today to share information on a range of decisions, including the structure of ORPP benefits, compliance and enforcement, plan comparability and member participation.

The government also released details on the ORPP's funding policy.

The details released today, combined with details released last August, will help employers prepare for the implementation of the ORPP, beginning on January 1, 2017.

Ontario has made significant progress on the ORPP in recent months. This includes the Ontario Retirement Pension Plan Administration Corporation appointing a CEO and Board of Directors, passing two pieces of enabling legislation and releasing key design and implementation details.

Studies show that many Ontarians are not able to save enough to maintain a similar standard of living when they retire. For many workers, long-term, full-time employment with pension benefits is no longer attainable. Today's announcement brings the government closer to achieving its goal of ensuring that every eligible Ontario employee is part of the ORPP or a comparable workplace pension plan by 2020.

ORPP plan design details have now been shared with the Canada Revenue Agency.

Building a secure retirement savings plan is part of the government's plan to build Ontario up and deliver on its number-one priority to grow the economy and create jobs. The four-part plan also includes investing in people's talents and skills, making the largest investment in public infrastructure in the province's history and creating a dynamic, supportive environment where business thrives.

Quick Facts

  • Pension coverage is lower for young workers than for any other age group. Only about one quarter of Ontario workers aged 25 to 34 participated in a workplace pension plan in 2012, compared to nearly half of workers aged 45 to 54.
  • The ORPP would expand pension coverage to more than 4 million workers. It would provide a predictable, reliable and inflation-indexed stream of income in retirement by replacing up to 15 per cent of an individual’s earnings, up to $90,000 (in 2017 dollars).
  • Enrolment would be phased in to ensure that the ORPP is focused on workers without access to a workplace pension plan, and to give employers time to adapt.
  • Under the proposed phase-in, plan members would start making contributions in 2017 and the ORPP would start providing benefits in 2022.

Background Information

Additional Resources

Crillion Benefits participates in round table on pharmacare's impact on private plans -