The Ontario Chamber of Commerce (OCC) is encouraged by the Government of Ontario’s decision to delay the implementation of the Ontario Retirement Pension Plan (ORPP) for one year. The OCC is now restating its call for government to support businesses’ transition to the new plan through a series of offset measures.
On January 22, 2016, the OCC provided Premier Wynne with a letter outlining its concern with the fast-approaching implementation date of January 1, 2017 and urging the government to defer ORPP contributions until 2018. The letter noted that in the absence of any direct communication from government, many employers are still unsure about which ORPP implementation wave applies to them, or whether they will have to update their current compensation and retirement savings plans.
“The announcement shows that government is listening to the business community as it moves ahead with the implementation of the ORPP,” said Allan O’Dette, President & CEO of the Ontario Chamber of Commerce. “A critical next step is for government to establish a clear communications timeline that outlines how and when employers will receive information relating to the ORPP and any obligations they or their employees may have.”
This announcement is the latest in a series of modifications to the ORPP’s design and implementation timelines that have been elicited through OCC advocacy, including expanded comparability rules and the public release of an economic impact analysis.
That economic impact analysis concluded that the plan will have a negative effect on the economy over the first twenty years of its lifespan. At its height, real household spending is projected to decline to $2.9 billion below the base scenario, resulting in an annual GDP loss of $2.3 billion by 2023. The OCC is urging government to mitigate these negative consequences by introducing measures that will offset the incoming costs of the new pension plan. This might include targeted tax relief and supports for small businesses, or measures similar to those implemented by the provincial government when the Harmonized Sales Tax was introduced in 2010.