The Ontario and federal governments announced on February 16, 2016 that they have reached an agreement regarding the Ontario Retirement Pension Plan (ORPP) and improving pensions for Canadians. With contributions originally set to begin next year, the Ontario government now proposes to phase-in the launch of the ORPP by starting enrollment in January 2017 and commencing collection of contributions in January 2018.

How will this affect businesses?

If applicable, the delay will give businesses more time to enroll in the ORPP, something that many organizations have been asking for. Large employers who would have been required to start making contributions to the ORPP on January 1, 2017 will now have one additional year to prepare for the ORPP and consider whether changes should be made to their existing retirement and savings programs.

There was no mention of delaying enrollment or contributions for small and medium-sized employers in the Ontario government’s announcement. Based on the current enrollment schedule, small and medium-sized employers without a registered workplace pension plan will be required to contribute to the ORPP starting January 1, 2019 and January 1, 2018 respectively.

CPP enhancements and next steps

The delay will also provide more time for the federal government and other provinces to discuss and develop options for enhancing the Canada Pension Plan (CPP). If provincial agreement on CPP enhancement is not reached, the Ontario government is committed to moving forward with the ORPP. The federal government acknowledges this and has agreed to facilitate plan registration and data sharing agreements and help ensure that contributions are collected efficiently and cost-effectively.

To read the government bulletin on the announcement, click here.