Dwight Duncan, Ontario Minister of Finance – Statement on Pension Reform

This bill is only the first major step in our reforms, with further changes to follow later in 2010.

These changes would add to progress Ontario has already made. After markets collapsed last year, the government moved swiftly to provide solvency funding relief to companies hit by the recession. We have also advanced long-term reforms: clarifying the complex and ambiguous rules on the treatment of pensions upon marriage breakdown, allowing some large pension plans to manage assets for other institutions, and initiating the first-ever actuarial study of Ontario’s Pension Benefits Guarantee Fund. Last year, we appointed an Advisory Council on Pensions and Retirement Income to help us with our reforms.

Ontario has been doing its part, but we cannot act alone. That’s why Premier McGuinty called on the Prime Minister to initiate a national summit on retirement income – a call recently echoed by all Premiers – so that governments can work in the collaborative, pan-Canadian fashion that these complex issues demand.

While we continue to await the federal government’s response to this call, some collaboration has already begun. The provinces and the federal government have completed joint research to diagnose the health of our retirement income system, and plan to discuss a range of options for strengthening the system at the next finance ministers’ meeting later this spring.

The options under consideration include: expansion of public pensions through the Canada Pension Plan; supplementary defined contribution pension plans to provide additional options for retirement savings for Canadians without workplace pensions; pension innovations to expand coverage, such as target benefit plans; and reforms to tax assistance to encourage more savings and plan innovation.

Building on the extensive consultations we have held to date, our government will continue to seek the views of Ontarians in the lead-up to the next finance ministers’ meeting. For now, we are keeping all options on the table.

We must bear in mind that effective solutions take time, that government cannot reverse all the effects of the global recession, and that the principal beneficiaries of any progress we make will be our children and grandchildren, not us.

Despite the complexities and challenges of strengthening our retirement income system, none of us – governments, unions, businesses or individuals – can afford to shrink from the task. Ontario’s government is making progress, and we will continue to do our part.

Keywords: pension reform