OCC re 2016 ONTARIO BUDGET
The Ontario Chamber of Commerce (OCC) is commending the government for addressing business concerns with the cap and trade system, and is calling on government to take the same approach as it moves forward with the Ontario Retirement Pension Plan (ORPP). As the province moves closer to fiscal balance by 2017-18, the OCC worries that without true service delivery transformation, the government will be unable to meet its deficit elimination target.
“We are encouraged by the approach government has taken to the implementation of the cap and trade system,” said Allan O’Dette, President & CEO of the OCC. “We’re also encouraged by the government’s commitment to ensure the proceeds from the new cap and trade system are not subsumed under general revenues. As this policy is implemented, government must ensure that SMEs are not adversely effected.”
In its 2015 report on cap and trade, the OCC had called on government to invest cap and trade proceeds in a way that helps businesses in the transition to a lower-carbon economy. The OCC notes, however, that the employer community is eager to help shape how the $1.9 billion in proceeds are spent.
“Government needs to work with the business community to shape how the funds in the Greenhouse Gas Reductions Account are allocated,” said O’Dette. “This collaborative approach, working with the business community to transition into this new policy, is the same approach we have called on the government to take with the ORPP. On that front, more needs to be done to ensure that there are no short to medium term negative impacts on GDP and consumer spending.”
Regarding deficit reduction, the OCC notes that despite prior pledges to do so, the government has not engaged in wholesale reform of any major programs or services over the past two years. The OCC is concerned that the government will not achieve its deficit reduction targets unless they work with the private sector to identify areas where an injection of private sector capital and expertise can improve service quality and/or lower service provision costs.
The OCC was pleased to see the government restate its commitment to the Going Global Export Strategy by investing an additional $30 million in the strategy over the next three years. The Export Market Access program, delivered by the OCC, is a key part of the government’s Going Global strategy and has helped 423 Ontario companies generate $89 million in export sales over the past two years.
The OCC is also eager to partner with government on a newly announced financial literacy initiative. Budget 2016 committed $650,000 in matching money to a chamber-led program for high school students that uses humour to educate youth about money management, credit, debt and savings to empower students with the knowledge they need to make good financial choices.
CCC re FEDERAL BUDGET
Every other week, the Canadina Chamber of Commerce (CCC) release 5 Minutes for Business, a publication written by Hendrik Brakel, CCC’s Senior Director of Economic, Financial and Tax Policy. In these publications, Hendrik briefly describes current issues that affect the Canadian economy and provides insight on what it will mean for Canadians today and the future. In this week’s edition, Hendrik is at Star Wars level of excitement over the federal budget, which will be tabled on March 22, because the stakes are huge for the government and expectations are sky-high.
Will an empire of program spending overwhelm the plucky investments in productivity? Will the evil deficit be defeated in one of the sequels or will it conquer the planet? Will the youthful lord follow in the footsteps of his father?
Come March 22, the CCC be watching for spending for productivity-enhancing, trade-enabling infrastructure, a reasonable plan to return to balanced budgets and measures to boost business competitiveness.
To read this week’s 5 Minutes for Business, click HERE.
MORE CONCERNS re ONTARIO PENSION PLAN (ORPP)
New analysis by the Ontario Chamber of Commerce (OCC) finds that the government’s plan to offset the impact of the Ontario Retirement Pension Plan (ORPP) on employers falls short. The government is timing the implementation of the ORPP to coincide with reductions in Employment Insurance (EI) and Workplace Safety and Insurance Board (WSIB) premiums, with the intention of partially offsetting the costs of new pension contributions. While the OCC supports the government’s intent, the organization’s analysis reveals that the costs of new pension contributions will still be significant.
OCC analysis finds that the average employer will face significant cost increases in 2022, the year when both EI and the first wave of WSIB reductions are in full effect. For an average employee making $30,000 a year, the employer would incur $306 in new costs; a $50,000 employee would see the employer faced with a $554 cost increase; and a $90,000 employee would see the employer faced with a $1,331 cost increase.
This analysis also demonstrates the impact that the ORPP will have on three different representative firms: a representative small, medium, and large business would see only 31 percent of the cost of the ORPP covered by EI and WSIB reductions. For employers that are not currently subject to WSIB premiums, these measures will offset even less of the cost of ORPP contributions.
The complete analysis can be found on the OCC website (www.occ.ca).