Today, the government is introducing legislation that will pave the way for a new public pension scheme for Ontario. The ORPP, which aims to supplement the Canada Pension Plan (CPP), will require employers to match employee pension contributions, increasing the cost of doing business. For example, in the case of a business that employs 10 people who earn $45,000 each, the employer will be obligated to pay almost $8,000 per year in additional pension contributions.According to a recent survey conducted by the Chamber, 72 percent of businesses in the province believe that pension reform should be a priority for government. However, the same businesses are also clear about their concern for Ontario’s broader economic picture, in which the economy is projected to grow slowly for the foreseeable future.
“Employers worry that by making it more expensive to hire, the new pension plan will negatively impact job creation and hurt Ontario’s competitiveness,” says Allan O’Dette, President & CEO of the Ontario Chamber of Commerce. “Combined with increases in electricity prices, high WSIB rates, and, for many employers, a higher minimum wage, the new pension plan will burden businesses that are already struggling to meet the rising cost of doing business in Ontario.”
According to the same survey, only 23 percent of the nearly 1,000 responding businesses could afford the costs associated with increased employer pension contributions.
A coalition of over 50 chambers of commerce and boards of trade from across the province recently submitted a letter to the Government of Ontario, calling on it to respond to a number of crucial, but unanswered questions.
“What will be the impact of a fully-implemented ORPP? What happens when a business can’t afford to meet the requirements of the ORPP? How much will it cost to administer a standalone provincial plan?” asks O’Dette. “Businesses across Ontario are seeking answers to these questions.”
“The retirement income challenge is a real one,” he adds. “However, we need to ensure that any changes to the pension system are made with a full understanding of the impact they will have on Ontario’s business climate. We are not satisfied that these questions have been fully answered.”
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For more information, contact:
Neville McGuire
Manager, Communications
e. [email protected]
t. 416.482.5222 ext. 2410