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Byemail:kkoch@ola.org
May25,2015
SooWong,MPP
Chair,StandingCommitteeonFinanceandEconomicAffairs
c/oKatchKoch,Clerk
Room1405,WhitneyBlock
Queen'sPark,Toronto,ONM7A1A2
Re: OntarioFederationofLabourResponsetoBill91,BuildingOntarioUpAct
(BudgetMeasures),2015
DearMs.Wong,
ThankyoufortheopportunitytocommentonBill91,BuildingOntarioUpAct(BudgetMeasures),
2015.Iammakingthissubmissiontodayonbehalfofour54memberunions,representingamillion
workersinOntario.
TheOntarioFederationofLabourmadeasubmissiontitled“TowardsaPoverty‐FreeOntario”as
partofthisyear’spre‐budgetconsultations.Itcontained15detailedrecommendationsdesignedto
improvethelivesofmillionsofOntariansthroughstrengthenedsocialprograms,newsocial
benefits,improvedcollaborativeprocesseswithlocalcommunities,andincreasedpublicdollars
throughamorefairtaxationsystem.
However,afteranassessmentofBill91,weregretfullyconcludethattheOntarioBudgetfailsto
addressthegrowingpovertyinourprovince.
It’sunderstandablethattheprovincecannotaddressthepovertyandvulnerabilitythatplaguesus
withoutadditionalresources,andthat’swhyweputforwardseveralrecommendationswhich
includedtaxincreasesforcorporations.
However,theOntarioBudgetsellsOntariansshortbychoosingprivatizationovertaxreform.The
resultwillbeadamagingandirreversiblelegacythatentrenchestheeconomicdivide,erodespublic
servicesandleavesapoorerprovinceforfuturegenerations.
Theplantoselloff60%ofOntarioHydroOneisdeeplyflawed.Wedisagreethatprivatizingvital
publicutilitiessuchasHydroOneisthesolutiontofundbadlyneededinvestmentsin
infrastructure.
‐ 2 ‐ Inourassessment,thebudgetsellsmorethanjustOntario’spublicassets,itsellsfalsechoices.
Ontariansdonotneedtochoosebetweenpublictransitandpublichydro;municipalinfrastructure
versushospitalclosures;goodjobsorabalancedbudget.Wedonotneedtopitpublicpriorities
againstvitalpublicservices.Insteadthegovernmentshouldaddressthemostobviousanswer,
whichisaskingcorporationsandhigh‐incomeearnerstopaytheirfairshare.
Inourpre‐budgetsubmission,theOFLcalledontheOntariogovernmenttousepublicinvestment
andtaxreformtoensurethatprosperityisshared,getmoreOntariansworkingandbuildafairer
society.
Wecalledattentiontothe370,000Ontariochildrenwholiveinpoverty;theonemillionworkers
whoearnatorneartheminimumwage;theoneinfiveOntarianswhoreceivehelpfromafood
bankorcharity;andthenearlyhalfofallresidentsintheGreaterTorontoAreaandHamiltonwho
areworkinginprecarious,part‐timeandinsecureemployment.Allofthisstandsinstarkcontrast
toCanada’shighestpaidCEOs,whotodaymake171timestheaverageCanadianincomeatatime
whenOntariocorporatetaxrateisthelowestinNorthAmerica.
Simplyrestoringcorporatetaxratesto14percent,crackingdownontaxcheatersandremoving
exemptionsintheEmployerHealthTaxcouldinjectanestimatedsixbillionintoinfrastructure,jobs
andanti‐povertyinitiativeseachyear.However,thebudgetdoeslittlemorethantinkerwiththe
symptomsofpovertyandinequalityratherthanaddressinginequitiesinthetaxsystemthatareat
therootofthecrisis.
PrivatizationofHydroOneInc.
Inthe2015OntarioBudget,theOntarioGovernmentexpresseditsintentiontosellupto60percent
ofitscurrent100percentownershipofHydroOneInc.toinvestorsthroughanInitialPublic
Offering(IPO),commencingwithaninitial15percentsell‐offin2015‐16.
ThisprivatizationofOntario’spubliclyownedelectricitytransmissionanddistributionutilitywill
significantlyreduceOntario’sannualrevenues,riskdrivingthecostofelectricityupwardfor
Ontariocitizensandcompaniesandpotentiallyimpairtheabilityofthegovernmenttopromote
energyconservationandenvironmentalsustainability.
Excessiveincreasesinelectricityratearebadforconsumers,badforbusinesses,andbadforthe
economy.OurratesarealreadyontheriseandsellingHydroOnewouldonlymakeitworse.The
moreourelectricitysystemiscontrolledbyprivateinvestors,theharderitwillbetopreventrate
increasesthroughtheOntarioEnergyBoard(OEB).
ButequallyimportanttoconsideristhatHydroOneprivatizationremovesanimportantsourceof
stable,predictablerevenuefortheprovince.HydroOnegeneratesover$800millioneveryyearin
revenueforthepublicpurse.Onceit’ssold,welosethatincomeforever.
‐ 3 ‐ Selling15percentofHydrowillactuallyresultinanetlosstothepublicof$84.7millionayear.
Sellinga60percentstakewillcostOntario$338.8millioneveryyearinlostrevenue,dollarsthat
areneededtofundourpublicservices.
TheOntarioGovernmentshouldimmediatelyhalttheplannedInitialPublicOfferingofHydroOne
Inc.sharesandretain100percentpublicownershipofHydroOneInc.Weencouragethe
governmenttolookforothersourcesofpublicrevenuegenerationthatdonotdiminishOntario’s
vitalpublicassets,suchasensuringthatcorporationsandtaxcheatersarepayingtheirfairshare.
TheOntarioRetirementPensionPlanAdministrativeCorporation(ORPPAC)
TheOntarioLiberalgovernmentismovingforwardonplanstoestablishtheOntarioRetirement
PensionPlan(ORPP).Thepensionplanisapositivestepinaddressingworkers’needfordecent
pensions.
TheORPPpromisestohelpreducethepovertycrisisforseniorsbyprovidingadditionalretirement
benefitstooverthreemillionworkersintheprovince.TheOFLsupportstheORPPinprinciple;
however,improvementstotheORPParenecessarytoensuregoodpensionsandwidespread
coverageforOntarioworkers.
TheOntarioGovernmenthasproposedexemptingemployersproviding“comparablepension
plans”frombeingrequiredtoenrolltheiremployeesintheORPP.Thismeansthatmanyemployees
willmissoutontheORPP’sbenefitsuponretirement,suchasreplacingupto15percentofpre‐
retirementincome.
It’sthepositionoftheOntarioFederationofLabourthatOntariansdeserveauniversalORPPwhere
nobodyisleftout.BycoveringallOntarians,theORPPwouldhelpmanymorepeople,beexposedto
lessfinancialrisk,bemorecompatiblewiththesuccessfulCanadaPensionPlan,andmost
importantly,befarlesscostlyandeasiertoadminister.
TheOntariogovernmentshouldnotassumethatpeoplewhoseemployersprovidedefinedbenefit
andmulti‐employerpensionplansare“takencareof”forretirement.Membersinprivatesector
definedbenefitplanshavetoomuchoftheirretirementsecuritytiedtothecompany–justaskthe
Nortelretireeswholost30percentoftheirpension.
Incontrasttoourreasonableproposals,thebusinesslobby’sprotestsagainsttheORPPrangefrom
weakeningtheORPP–byexcluding“comparableplans”inthebroadestwaypossible–tojustplain
axingtheplanaltogether.
ThefinaldecisiononthescopeoftheORPP,includinghowmanyOntarianswillbecoveredbythe
ORPP(i.e.towhatdegreewillitbeuniversal,orbefullofexclusionsforso‐calledcomparable
plans),willbemadesooninafuturepieceoflegislation,notyetintroduced.
ItistheOFL’srecommendationthattheOntarioGovernmentdoesnotallowexemptionsforso‐
called“comparableplans”andincludeallOntariansintheORPP,makingtheORPPtrulyuniversal.
‐ 4 ‐ TheOntarioGovernment’s2015‐2016budgetimplementationlegislation,Bill91,contains
measurestocreatetheOntarioRetirementPensionPlanAdministrativeCorporation(ORPPAC).
TheORPPACwillberesponsibleforoperationalizingtheORPP,administeringtheplanand
investingcontributions.Itwillbeledbyaboardofdirectorscomposedofbetweennineand15
membersappointedbytheLieutenantGovernorinCouncil(theCabinet).
TheORPPACmeetsmanyofthecriteriatheOFLputforwardinitsbrieftothegovernmentonthe
ORPPinFebruary,“AMade‐in‐OntarioPlantoEndRetirementInsecurity”withanimportant
exception:therearenoseatsreservedforlabourontheORPPAdministrativeCorporation’sBoard
ofDirectors.
TheORPPACneedstohavedesignatedseatsforlabourrepresentativesifitistobediverse,
transparent,andaccountable.ItistheOFL’srecommendationthatlabourUnionsberepresentedon
theORPPAdministrativeCorporationBoardofDirectors.
Theprincipleoffairlabourrepresentationonprovincialpensionplanshasalreadybeen
establishedinOntariobylargemultiemployerplanssuchasOMERSandHOOP.TheOMERS
SponsorsBoardhas14members,with7positionsheldbyemployeerepresentatives.Onthe15
memberOMERSAdministrativeBoard,thereare4employeerepresentatives.HOOPhasa16
memberboard,with8employeerepresentatives.
ThankyoufortheopportunitytomakethissubmissiononBill91,BuildingOntarioUpAct(Budget
Measures),2015.Ifyouhaveanyquestions,orwouldliketoreceiveadditionalinformation,please
contactSteveStaplessstaples@ofl.caor416‐578‐3230attheOntarioFederationofLabour.
Respectfullysubmitted,
SIDRYAN
President
OntarioFederationofLabour
SR/kncope343