Monthly Archives: October 2015

Trudeau, Wynne Pension Visions on Very Different Paths

15-10-28 trudeau wynne cpp hug

Despite the big hug and a short-term promise by Trudeau to help implement Ontario’s new pension plan, a look beneath the surface reveals serious obstacles to reconciling Wynne’s and Trudeau’s pension visions.

Prime Minister Elect  Justin Trudeau has promised to do what Stephen Harper pointedly refused to do – help Premier Kathleen Wynne implement Ontario’s new pension plan.

But reconciling Trudeau’s long-term vision of enhancing the Canada Pension Plan (CPP) with Wynne’s “ready-to-go” Ontario Retirement Pension Plan (ORPP), could prove tricky.

Trudeau to help on short-term implementation issues

The Conservative government refused to change federal regulations to help establish and collect contributions for the Ontario Retirement Pension Plan (ORPP), which is due to start collecting premiums in January, 2017.

In fact, the pension issue had become a significant point of conflict between the federal Conservative government and the Ontario Liberal government. During the recent campaign, Mr. Harper went so far as to say that he was “delighted” that his decision not to help Ms. Wynne “is making it more difficult for the Ontario government to proceed.”

But what a difference an election makes! The two Liberal leaders had a brief meeting at Queen’s Park on Tuesday and there appeared to be a complete meeting of the minds on the pension issue – at least in the short term.

According to a statement issued after the meeting, the new federal Liberal government will “direct the Canada Revenue Agency and the Departments of Finance and National Revenue to work with Ontario officials on the registration and administration of the [ORPP].”

Registration refers to the fact that unless a pension plan is registered under the terms of the federal Income Tax Act, employee and employer contributions are not tax deductible. Once registered, pension contributions and investment earnings are tax-exempt until benefits are paid to a retiree.

Administration primarily refers to piggy-backing ORPP premium deductions on the existing CPP payroll contribution infrastructure. Ontario had issued a request for proposal for a third party to help administer the plan because of the outgoing Conservative government’s refusal to co-operate. Now it won’t need that third-party partner, which means the ORPP should be less expensive to operate. Continue reading

Five Key Issues Facing the Trudeau Government

Trudeau

In its first few months, the newly elected Trudeau government will be facing a range of issues including infrastructure, pensions, and a middle class tax cut.

In this post, Canada Fact Check takes a look at five key issues facing the newly elected Trudeau government for the period leading up to, and including, the early-Spring budget.

Infrastructure

The new Liberal government’s top priority will be to quickly implement its high profile infrastructure program.

Trudeau says a Liberal government will run deficits for three straight years and will double spending on infrastructure to stimulate economic growth.

According to a Liberal policy paper, the Liberal fiscal plan would see “a modest short-term deficit” of less than $10 billion for each of the first three years and then a balanced budget by the 2019-2020 fiscal year.

The policy paper suggests that over the next decade the Liberals would spend $125 billion on new infrastructure investment — about twice the amount the Conservatives had committed for infrastructure. Much of this new infrastructure would be financed through a new Canada Infrastructure Development Bank.

Liberal infrastructure investments would focus on three areas: public transit, social infrastructure such as affordable housing and child care, and environmental projects like clean energy.

Projects funded would reflect the priorities of the provinces and municipalities. Continue reading

What you need to know about the Trans-Pacific Partnership (TPP)

15-10-11 TPP

Current rules under the North American free-trade agreement (NAFTA) require that 62.5 per cent of auto parts come from North America in order to avoid tariffs. Under the TPP, content requirements are lower and this may cost Canadian jobs. A 45-per-cent level will be  required to be considered duty-free for some parts and 40 per cent for other components.

 

 

What is the Trans-Pacific Partnership (TPP) ?

Canada, U.S. and Mexico have long had special access to each other’s markets under NAFTA.

Instead of a group of three as under NAFTA, twelve countries would share in the advantages of TPP membership. Broadly speaking, the Trans-Pacific Partnership (TPP) is similar to NAFTA in that it involves pledges to reduce or eliminate tariffs on a wide range of goods and services. It also sets out rules for resolving disputes and provides a modest attempt to set some minimum employment standards in the twelve member countries.

Could anything stop the implementation of the TPP?

The TPP deal still requires the approval of the U.S. Congress and many Democrats and some Republicans are expressing strong reservations about the deal.

For example, just days after the signing, leading Democratic Presidential candidate Hillary Clinton said she couldn’t support the TPP. Continue reading

Trudeau, Mulcair vow end to Harper Employment Insurance changes

employment insurance photo

Both Trudeau and Mulcair have promised Employment Insurance changes to make it easier for jobless to qualify for unemployment insurance.

Just 36.6% of unemployed workers are receiving Employment Insurance benefits – an all-time low in Canada, according to recent government numbers.

In 1990, 83% of the unemployed received benefits, but coverage declined to 42% in 1998 — when the former Liberal government redesigned the program to make it far less generous. After further changes by the Conservative government in recent years, the beneficiaries-to-unemployed ratio fell below 40% in 2012 for the first time in almost 40 years.

In 2013, the ratio of beneficiaries-to-unemployed dropped to 37% after the government implemented further restrictions, requiring Canadians to accept any job deemed “suitable” — even if it’s unrelated to a worker’s career and comes with a 30% pay cut. In Toronto, the ratio is closer to 20% meaning 80% of Toronto’s unemployed are ineligible for Employment Insurance. Continue reading