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Former prime minister Paul Martin joins Ontario premier Kathleen Wynne in a press conference announcing at Queen's Park on Jan. 22, 2014.

FERNANDO MORALES/The Globe and Mail

Ontario Premier Kathleen Wynne is pushing forward with a new provincial pension plan, enlisting some high-profile help and positioning the issue at the centre of the next provincial election.

Ms. Wynne appointed Paul Martin to advise Finance Minister Charles Sousa on crafting the plan Wednesday. It's a file on which Mr. Martin has ample experience: As federal finance minister in the 1990s, he led the last major round of Canada Pension Plan reform, when he increased contributions to make up for a major unfunded liability in the plan.

"If we don't act now, too many people will have to live off their savings when they retire – savings that have not been put in place and that will not be enough," Ms. Wynne said after an hour-long meeting with Mr. Martin at Queen's Park. "I want for Ontarians that they have security in retirement. I want people who are in the workforce today, and their children, to know that there is a structure in place, that they will have a dignified retirement."

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Mr. Martin warned that, just as he had to act more than a decade ago to prevent a catastrophe at CPP down the road, the nation must move now to ensure the plan is adequate for future retirees.

"The role of government is not only to deal with today – it is to deal with the intergenerational inequities that arise when a government doesn't act," he said.

Mr. Martin will work for free, Ms. Wynne's spokeswoman said. He will not receive a salary, stipend or reimbursement for his expenses.

Ontario is launching its own pension plan after the federal government shut the door to increasing CPP premiums and benefits last month. Ottawa argues that making companies pay more into the pension plan at a time of economic uncertainty will only hurt them.

"Premier Wynne will disadvantage Ontario's businesses with higher payroll taxes, killing jobs and deterring investment," Kevin Sorenson, the minister of state for finance and Ottawa's point-man on the file, said in a statement.

Mr. Sorenson argues the provinces should instead look to voluntary Pooled Registered Pension Plans to boost savings. While Ontario promised to bring in PRPPs in the last budget, the province has not yet moved forward on them.

Ms. Wynne said cuts to payroll taxes in Ontario – as well as a projected drop in EI premiums – offset the extra that employees and businesses will be asked to pay for the new pension plan.

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Mr. Martin argued that pension premiums are "not a tax," because workers will get the money back – plus the investment dividends it has generated – when they retire.

The exact structure of the pension plan, along with the size of its premiums and benefits, has yet to be worked out. Ontario is also hoping to have other provinces participate in the plan. Mr. Sousa is currently reviewing options, and Mr. Martin will advise him on that front.

The Liberals are already making pensions an electoral issue: their candidates in two by-elections scheduled for February are promising the pension plan in their stump speeches.

And with an election widely expected this spring, the plan is likely to be a central issue in the party's campaign.

The Progressive Conservatives oppose the pension plan, for the same reason as the federal Tories, arguing it will hurt corporations.

The New Democrats support an Ontario pension plan – and even unsuccessfully moved a specific proposal for one in the legislature in 2010 – but accuse the Liberals of not moving quickly enough for one. On Wednesday, they described the appointing of Mr. Martin as a "stalling tactic."

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