May 30, 2018
Despite not yet announcing its election platform, Ontario’s Progressive Conservative Party may have the greatest potential for affecting pensions and benefits in Ontario.
“The Conservatives’ broad focus on balancing the budget, which may result in their rationalizing OHIP and delisting some services, represents the real impact potential in this election,” says Anneliesje Warner, a health consultant at the Segal Group Inc. in Toronto.
It’s not that Conservative Leader Doug Ford has been entirely mum about health care, pensions and workplace laws. He has promised a public dental plan for low-income seniors, albeit at a relatively insignificant cost of $98 million. Also, while committing to not raising the minimum wage to $15, he has promised to eliminate provincial taxes for minimum wage earners at a cost of about $500 million annually.
For their part, the Liberals are planning to introduce a drug and dental program to cover 80 per cent of specific drug and dental costs, up to $400 for single people, $600 for couples and $700 for a family of four with two children. The program carries a price tag of $800 million over two years. If elected, the party also intends to expand its youth pharmacare program, called OHIP+, to include seniors. The change could cost up to $575 million by 2020/21.
According to Tiina Liivet, vice-president of health and benefits at Accompass Inc. in Toronto, the Liberal promises wouldn’t have a significant impact or impose a significant burden on private benefits plans.
“The maximum cash allowance for drugs and dental, which is set at $400 per person, $600 per couple and $50 per child, could reduce costs for private plans but in a fairly insignificant way,” she says. “The main thrust of the OHIP+ expansion is that it will eliminate deductibles and copayments for seniors.”
On the pension front, the Liberals have proposed the creation of a requirement to disclose events that could affect pension plan solvency, such as asset-stripping or extraordinary dividends; the establishment of an advisory committee under the new Financial Services Regulatory Authority with a view to dealing expeditiously with threats to pension security; and the development of a distressed pension plan workout scheme. In the case of the latter proposal, the idea is to help employers and plan members restructure distressed plans so as to allow their continuation.
The Liberals have also promised better access to pensions for workers in Ontario’s private sector. The proposal would allow outsiders, including individuals with no connection to the plan sponsor or company, to buy into existing pension plans. Premier Kathleen Wynne said her party would also support the creation of portable pension plans that remain with workers from job to job.
The New Democratic Party’s health-care proposals are the broadest of the three parties. The platform includes a $575-million pharmacare plan covering 125 prescription drugs and a $670-million dental program to cover contract and full- and part-time workers, as well as low-income children and seniors.
The dental program has the potential to have the most impact, according to Liivet. “It could be the start of a much broader initiative, putting dental on the same footing as other social insurance plans,” she says, noting it would impose minimum standards on employers that provide private dental coverage.
“Employers will have to choose between participating in the provincial plan or continuing with a private plan that meets the minimum standards,” says Liivet. “They’ll have to strike a balance between cost and the employee experience.”
The difficulty with opting for the provincial plan, she believes, is control.
“Going with the provincial plans means that an employer will be abandoning control over the cost of the program to a third party,” she says.
“And I’m not sure that the NDP’s estimates have factored in the cost of administration, so the costs may be higher than anticipated.”
Liivet also notes that existing private dental plans tend to be quite comprehensive. “We can expect more limited coverage from the NDP than we see in employer-sponsored plans, so there will still be a role for private plans,” she says.
“While the employer will remain in the driver’s seat in determining whether they’re willing to provide coverage beyond the minimum standards, the fact remains that some employees may end up with less coverage at a higher cost.”
The impact of the NDP’s pharmacare regime, however, is less significant than that of the dental plan, largely because the drug program will cover only about 125 medications. Again, employers will have to decide the degree of coverage they’ll provide beyond that.
“A private plan would just wrap around what the NDP is proposing,” says Liivet.
On the pension front, the NDP plans to increase the pension benefits guarantee fund maximum payments to $3,000 monthly from the current ceiling of $1,500, liberalize access to public jointly sponsored pension plans and pressure the federal government to provide greater protections to pensioners in insolvency situations.
So with Ontario’s political parties battling it out on a number of fronts, what do you think about the particular focus on dental coverage? Is it time for Canadian governments in general to expand public dental coverage or is it not a priority given the private plans in place, the current discussions around pharmacare and the cost burden to taxpayers? Have your say in Benefits Canada‘s weekly online poll.
A recent report suggesting U.S. public sector pension plans are net revenue generators for governments was the fodder for last week’s poll question. Is the suggestion true of public sector pensions in general? The majority (79 per cent) of respondents said agreed, suggesting public sector plans make a significant contribution to both the economy and government coffers and essentially pay for themselves. The remaining 21 per cent said no, finding that given the costs, generous benefits and long-term liabilities, it’s not conceivable that public pensions are net revenue generators.