A new survey of business owners from the Greater Sudbury Chamber of Commerce and the Ontario Chamber of Commerce shows that the implementation of the Ontario Retirement Pension Plan (ORPP) could have negative consequences for Greater Sudbury’s economy.
The survey indicates that only 26 percent of businesses in Ontario believe they can shoulder the financial burden associated with the ORPP. If faced with mandatory increased contributions under the ORPP, 44 percent of surveyed businesses indicate that they would reduce their current payroll or hire fewer employees in the future.
In light of these findings, the Greater Sudbury Chamber of Commerce has joined a coalition of nearly 50 chambers of commerce and boards of trade from across the province that calls on the Government of Ontario to reconsider its proposed approach to boosting Ontarians’ retirement savings and assess the extent to which the implementation of the ORPP will negatively impact Ontario’s economy.
“Businesses consistently tell us that they cannot afford this new, mandatory cost on top of rising electricity prices and other cost pressures,” says Allan O’Dette, President and CEO of the Ontario Chamber of Commerce. “To provide clarity to the business community and the public around the potential impact on jobs, investment, and the broader economy, the government must conduct a comprehensive and publicly available economic analysis of the new pension plan before it moves forward with implementation.”
The ORPP, which aims to boost Ontarians’ retirement savings, will require employers to match employee contributions to the new plan. Employers that provide defined benefit pension plans will be exempt from these contributions, but the majority of employers in Ontario will have to pay into the ORPP, regardless of the retirement savings plans they currently provide to their employees.
In its recent submission to the Government of Ontario, the coalition points to evidence that the vast majority of Canadians are on-track to maintain their standard of living in retirement and that the ORPP will punish employers and employees who are already contributing to their secure retirement future through non-defined benefit workplace retirement savings plans.
“Our economy is still in a state of recovery,” says Geoff Jeffery, Chair of the Board, Greater Sudbury Chamber of Commerce. “The province is facing a large deficit and growing debt and employers are already confronted with rising costs including soaring electricity prices and high WSIB premiums as well as uncompetitive regulatory burdens. This is not the time to introduce a new cost of doing business,” adds Jeffery.
“The ORPP is a blanket solution to a problem that requires a targeted approach,” adds O’Dette. “A better approach would be to target the minority of households that are undersaving, like Pooled Registered Pension Plans.”
The chamber is concerned that the ORPP could cause employers to reduce their contributions to offset the new cost, or scrap their existing plans altogether.
“There are still many unanswered questions and the business community needs clarity,” adds Jeffery. “We are concerned about the potential impact of the ORPP on job creation, employment, Foreign Direct Investment and overall business competitiveness. We don’t want this to be yet another regulatory burden on employers,” says Jeffery.
The survey was conducted by the Ontario Chamber of Commerce in late January and early February 2015 and had 1,136 respondents.
Download the Greater Sudbury Chamber of Commerce’s submission to the Government of Ontario on the proposed ORPP:
https://sudburychamber.ca/wp-content/uploads/2015/02/GettingItRight_Submission_Feb18.pdf