Ont. spent $70M on pension plan
Aborted plan became a major campaign promise for premier in 2014
All told, Ontario’s aborted pension plan cost $70 million before a single penny of contributions was collected, the province revealed Thursday.
The top six executives tapped to run the Ontario Retirement Pension Plan Administration Corporation (ORPPAC) will split $2,020,000 in severance. In all, they will receive more than $2.8 million in compensation for their work to establish the now defunct plan. The plan’s CEO will, in the end, receive more than $825,000 for six months’ work.
The Liberals under Premier Kathleen Wynne announced the Ontario Retirement Pension Plan (ORPP) in their 2014 budget after discussions to expand the Canada Pension Plan (CPP) nationally fell through; but the Finance Ministry documents released Thursday reveal work began at least a year earlier. The plan became a major campaign promise in the June 2014 election that soon followed, a vote that returned the Grits to majority power.
Then, after a federal change in power, the province announced in June it would axe the ORPP after a deal was announced to expand CPP — a result of a major shift in federal policy that came in with the new federal Liberal government.
Wynne was quick to declare victory, saying Ontario’s pension designs put necessary pressure on other premiers and the feds to reach a deal before the ORPP was up and running.
But it’s Ontario residents who will bear the costs of the public policy victory. Finance Minister Charles Sousa and his associate minister in charge of pensions, Indira Naidoo-Harris, said in a joint statement the perceived urgency of the retirement crisis was worth the effort and cost: “The need to address the retirement savings gap was too important for us to sit idly by.”
Of the $70 million in sunk costs, almost half — $30 million — went to setting up the ORPP administration corporation, an arm’s length
Natasha Baylis pulled up to her boutique in Belleville, Ont., and went in through the back door, as usual. In the backroom, she started getting an order together for a customer while her two-year-old wandered into the front of the store and saw the glass door in tatters.
“Uh oh. Uh oh,” the toddler told her mother that day in early May.
“Just one minute,” Baylis said, not registering that anything was wrong. When she eventually made her way out front, she saw the shards of glass jutting out from the door. Baylis’s iPad and laptop were still on the counter, though. And all the money was in the unlocked cash register. All that was missing was the little, child-like mannequin in the front window — with only its hat and one of its arms left behind.
“It’s extremely weird, isn’t it?” she said. “They kidnapped my little girl mannequin.”
Baylis, who runs Mrs. B’s Bath, body that would have run the plan and its investments.
Of that, $6.3 million was spent on salaries, severance and benefits for the employees who would have run the ORPP. In all, between 2013 and 2016, the province spent $9.5 million in compensation directly related to the development of the ORPP.
The six top employees at the corporation, including CEO Saad Rafi, split over $2 million in severance. That means the executives split an approximate average of $366,666 each, while the 27 other employees each got an approximate average severance package of $62,522.
Rafi came to the ORPP after running the Pan Am Games, which the auditor general found came in $304 million over the original budget, but for which executives — including Rafi — split $5.3 million in completion bonuses. He is entitled to one year’s salary in Body and Gifts, is one of several shopkeepers to have fallen victim to what appears to be a serial mannequin thief in Belleville, a city of 50,000, about midway between Toronto and Ottawa.
“Somebody is out to steal our mannequins. We don’t know why,” Baylis said. “It’s creepy.”
On Wednesday, police said 11 mannequins — all female — have been stolen in five break-ins since May. In each case, a glass door at the shop was smashed and nothing else was taken, save for whatever clothes were on the mannequins at the time.
“Obviously it raises flags,” StaffSgt. Sheri Meeks said Wednesday.
“What is the motive for taking the mannequins? Is it because mannequins are expensive? Is there a more deviant motive for it?”
Shopkeepers who spoke to the Post said their stolen mannequins weren’t particularly extraordinary or rare — all worth less than $200 each.
At this point, Meeks said, investigators haven’t found images severance, or $525,000 in addition to the $302,925 in compensation he’s received so far, for a total of $827,925 for six months work.
NDP pensions critic Jennifer French said, while her party supported both the idea of an ORPP and pending CPP expansion, the result in Ontario was yet another example of Liberal cronyism.
“There are legitimate costs to creating such a plan,” she said. “Unfortunately, we’ve learned once again that the Liberal government has taken advantage of another opportunity to use public funds to reward their friends with golden handshakes.
“The severance packages for the top ORPP executives disclosed today are an insult to people in this province who can’t afford to retire.”
Marketing was one of the bigger costs to setting up the ORPP, with the Liberals pouring $8 million of the thief or thieves on surveillance footage, despite the fact that most of the break-ins occurred on the main street of downtown Belleville.
The latest case saw four female mannequin torsos taken from a shop north of downtown on Sunday. into pension-pumping ads — some of which the government says will be used on “upcoming marketing efforts to inform Ontarians about the changes to the CPP.” That’s more than 11 per cent of the final bill. The province had a third party compile the tally of costs and says it will have the auditor general confirm the $70-million tab. That total could end up slightly lower, as it includes $15 million to cover any wind-up costs.
The government will repeal the legislation creating the ORPP this fall, the ministers said. They also noted that, in the long run, CPP enhancement will prove much cheaper to administer — something they were loath to admit while the ORPP was still up-andrunning. Editor’s note: The author’s partner is a developer with the Canada Pension Plan Investment Board. Earlier this month, the same store lost two other mannequins in an overnight break-in.
Dawn ODell, who owns Simple Elegance, a women’s clothing boutique downtown, has also been targeted several times. She said in May, someone tried to pull her door from its hinges but didn’t get inside. They came back the next night, however, and smashed the glass in the door to steal two mannequins. And in June, the glass in the door was broken again with another two mannequins missing.
On top of the four mannequins, she’s lost the bikini and two dresses that went with them, and the $160 prom dress that was torn off the fourth mannequin.
ODell said she thinks the culprit tried to get in again last week, but was thwarted by stronger Plexiglas that was recently installed in the door.
“They scratched the hell out of the Plexiglas,” she said. “They’re putting an effort into it, which is crazy to me, just to steal a mannequin.”
OTTAWA — The federal government could have done a better job implementing the new payroll system that’s causing serious payday headaches for tens of thousands of civil servants, a senior bureaucrat admitted to a Commons committee Thursday.
But moving from the antiquated, paper-heavy pay system the government used for four decades to the electronic Phoenix system was the right call at the right time, said deputy public services minister Marie Lemay.
“I think we could have done additional measures (to smooth the transition process),” Lemay told the House of Commons committee that oversees government operations. “But the move to the second wave and the move to Phoenix is the right decision.”
MPs on the committee grilled Lemay and other officials with questions, including one civil servants and their unions have been asking for months: why was Phoenix rolled out when it was clear it had significant shortcomings?
There were indications of “bugs” in the Phoenix system after it was first launched on a limited basis in February following several delays and a third-party assessment, she said.
But the issues were minor, said Lemay, who took on a new role as deputy minister just as Phoenix was being fully implemented in a much larger second wave. And she would have recommended the system be given the green light at that time, she told the committee.
Still, knowing what she knows now, that second phase should have included more time for employees to be trained on the system, and the government should have retained many of the pay system employees that were let go as the new system came online, she said.
Earlier Thursday, federal officials said they expect to have resolved all of the pay delays created by the problematic new pay system by the end of October — but undoing the damage won’t be cheap.
Dealing with the months-long debacle, which has caused serious payday headaches for tens of thousands of civil servants, will cost an estimated $15 to $20 million, Lemay told a news conference earlier in the day. That doesn’t include upgrades that will be required to ensure the system runs more smoothly in the future, she added. “There’s another portion that we’re looking at doing to enhance and that I still don’t have a cost to.”