Defined benefit pension plans support more than one million beneficiaries in Ontario and these benefits provided more than $34.6 billion to the province’s gross domestic product in 2023, according to a new report by the Conference Board of Canada on behalf of the Healthcare of Ontario Pension Plan, the OPSEU Pension Trust and the University Pension Plan.
It found Ontario DB pension plans paid out $42.7 billion in benefits that accounted for 71 per cent of all retirement income and these benefits largely flow back into the Canadian economy, stimulating business growth and employment and generating revenue for all levels of government.
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On average, each dollar of DB pension payouts generated $1.43 in economic output for Ontario, said the report, noting the total economic output from DB pension payouts was more than $60 billion and supported 251,000 permanent full-time jobs, in turn generating $16.8 billion in labour income.
On an annual basis, DB pension benefits generate more than $17.4 billion in government revenue in Ontario, including $8.1 billion in federal taxes, $6.3 billion in provincial taxes and $3 billion in municipal taxes.
Ontario’s DB pension plans held more than $770 billion in assets in bonds, equities, infrastructure, real estate and other investments in Canada and internationally.
“The impacts discussed in the report are limited solely to the payouts made to pension beneficiaries,” said Alan Chaffe, associate director of economic research at the Conference Board of Canada and the report’s co-author, in a press release. “The final economic impact would be significantly greater if we were to consider the contributions made by pension plan investments, which also drive substantial economic growth, create jobs and generate tax revenues.”