Bay of Quinte Chambers of Commerce to Government: Ontario Retirement Pension Plan Could Have Negative Consequences For Economy
Bay of Quinte Region, February 23, 2015: A new survey of business owners from the Quinte West, Belleville, Prince Edward County and the Ontario Chamber of Commerce shows that the implementation of the Ontario Retirement Pension Plan (ORPP) could have negative consequences for the Quinte Region’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 Belleville, Prince Edward County and Quinte West Chambers have 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 recovery,” says Suzanne Andrews, Quinte West Chamber of Commerce. “This isn’t the time to introduce a new cost to doing business in the province as businesses are still reeling from the increased hydro rates and a higher minimum wage which have both added significant costs to the bottom line over the past 12 months.”
“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 under saving, 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.
“I fully expect to see businesses cut back on their payroll costs,” adds Michael McLeod, manager at the Prince Edward County Chamber. “We will see people laid off or their wages cut to allow businesses to offset this new payroll tax.”
“Our Province needs growth” says Richard Courneyea, President Belleville Chamber of
Commerce. “Forcing all Ontarians to participate in an ORPP in addition to the Canada Pension
Plan, simply to target a small band of our population who are under saving is the wrong approach. Implementing the ORPP will throttle economic expansion, hurt business and remove even more after tax dollars from families and those most vulnerable.
The survey was conducted by the Ontario Chamber of Commerce in late January and early February 2015 and had 1,136 business respondents.
Download the Bay of Quinte Chambers submission to the Government of Ontario on the proposed ORPP: http://www.occ.ca/portfolio/the-business-perspective-on-the-undersaving-challenge-in-ontario
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For more information:
Manager of Communications
Ontario Chamber of Commerce
t. 416.482.5222 ext. 2410