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The Liberal government is taking the first legislative step toward creating a made-in-Ontario pension.

Finance Minister Charles Sousa and Associate Finance Minister Mitzie Hunter on Monday are introducing the framework legislation that will lead to the creation of the Ontario Retirement Pension Plan (ORPP).

Designed to complement the Canada Pension Plan (CPP), the mandatory ORPP would deduct 1.9 per cent of the pay of Ontarians who do not have a workplace pension plan. Their employers would be forced to match that contribution.

There are some extreme points of view claiming this to be a tax just as they did when CPP was introduced. These are premiums, these are contributions made by individuals into their savings plans for themselves, said Sousa.

None of this money comes into the coffers of the government. Its managed outside of government. They (are making) the same argument today as they made about CPP in the 1960s, the treasurer said.

Hunter said the preferred option at Queens Park is for the federal government to enhance CPP, which pays out a maximum benefit of $12,500 a year.

But Prime Minister Stephen Harper has refused to bolster the national pension scheme, so the province is forging ahead on its own.

Mondays legislation commits the government to establish the ORPP by Jan. 1, 2017.

For a worker earning $45,000 a year, the Ontario plan would mean an additional $788 deduction a year with future retirees eventually receiving up to $25,000 in annual benefits.

Noting two-thirds of Ontario workers do not have an employees pension plan, Hunter said the onus is on the province to act to tackle the under-saving problem.

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Liberals tabling legislation to create Ontario pension