On August 11th the Government of Ontario announced that it will expand the comparability rules under the proposed Ontario Retirement Pension Plan (ORPP). However, employers remain wary of the introduction of a new pension plan at a time when the cost of doing business in Ontario continues to rise.
The Ontario Chamber of Commerce (OCC) is encouraged by the government’s decision to expand the definition of comparability under the ORPP to include some Defined Contribution (DC) plans. This means that employers who already provide certain DC pension plans for their employees will be exempt from contributing to the new ORPP. The OCC is also encouraged by a longer phase-in period announced today, which will help many Ontario businesses transition into the plan.
“The announcement is a step in the right direction,” said Allan O’Dette, President & CEO of the OCC. “Broadly speaking, the Government of Ontario has responded to our advocacy efforts. Despite the announcement, we remain concerned that the ORPP in its current form will have a negative impact on business competitiveness.”
In June, the OCC and a coalition of over 150 businesses, sector associations, chambers of commerce, and boards of trade came together to urge the government to expand its definition of pension plan comparability to include capital accumulation plans, including, but not limited to, DC plans.
Despite the announcement, the OCC warns that in its current form, the ORPP will raise costs for the majority of businesses who operate in the province, including those employers that offer non-comparable plans like Group RRSPs. Recent OCC survey data indicates that if faced with mandatory increased contributions under the ORPP, 44 percent of businesses would reduce their current payroll or hire fewer employees in the future.
“We remain deeply concerned about the cumulative burden facing Ontario employers,” said O’Dette. “Rising electricity prices, the introduction of a cap and trade system, and the ORPP will further add to the cost of doing business in Ontario. This is why we have asked the government to conduct and publicly release the results of an economic impact analysis of their proposed pension plan.”
Following considerable advocacy efforts by the OCC earlier in 2015, the government committed to releasing a cost-benefit analysis of the ORPP before the end of the year.
“We will continue to work with government in order to ensure they have a full appreciation of the potential impacts of the ORPP,” said O’Dette.
The OCC – which includes the Flamborough Chamber of Commerce (FCC) as a member – is an independent, non-partisan business network. Its mission is to support economic growth in Ontario by advocating for pro-business policies and defending business priorities at Queen’s Park. For more than a century, the OCC has been providing our members with practical supports, advantageous network opportunities, and access to innovative insight and analysis. The OCC represents local chambers of commerce and boards of trade from communities across Ontario. Through this network the OCC is the voice of 60,000 members that range from small businesses to major corporations and industry associations.
For complete details as prepared by the provincial Ministry of Finance please click HERE.