Some members of the business community are taking Ontario Finance Minister Dwight Duncan to task over his decision not to plow ahead with new savings plans Ottawa is seeking to create.
Perrin Beatty, CEO of the Canadian Chamber of Commerce, Catherine Swift, CEO of the Canadian Federation of Independent Business, and Frank Swedlove, head of the Canadian Life and Health Insurance Association, sent Mr. Duncan a letter Thursday, encouraging him to “proceed as quickly as possible with the establishment of Pooled Registered Pension Plans.”
Read more about Mr. Duncan’s concerns with respect to PRPPs here.
“The Federal Government has introduced PRPP legislation that will be passed shortly,” the letter states. “Quebec announced a regime equivalent to PRPPs, called VRSPs, in their recent budget. It is time for Ontario now to step up to ensure that Ontario residents, particularly those who work for small and medium sized businesses, can reap the benefits of a low-cost, accessible pension plan.”
Ontario has long said that it would prefer to see the Canada Pension Plan expanded, but there are other provinces that oppose any increases in CPP premiums and Ottawa is not able to unilaterally change the program.
In March, Mr. Duncan called the federal government’s proposal to create PRPPs a “weak-kneed” response, and said that federal finance minister Jim Flaherty is “penny wise and pound foolish.” Mr. Duncan made his concerns about PRPPs clear in his annual budget last month.
PRPPs are supposed to make it easier for self-employed individuals and employees of small firms to save for retirement by allowing them to tap into a large pension plan. The plans would be administered by insurers and other financial institutions.
Among other things, Ontario pointed in its budget to the fact that these companies would be making money off PRPPs, and said that “in a for-profit environment, priority must be given to the interests of plan members.”