THUNDER BAY – The Thunder Bay Chamber of Commerce is joining with the Ontario Chamber of Commerce in urging the government to defer legislation that will lay out a framework for the Ontario Retirement Pension Plan (ORPP). The business group is calling on the Government of Ontario to answer outstanding questions about the impact the plan could have on the province’s economic competitiveness.
On Monday, the Government introduced legislation that will pave the way for a new public pension plan for Ontario. The ORPP, which aims to supplement the Canada Pension Plan (CPP), will require employers to match employee pension contributions and will further increase the cost of doing business.
Example: for a business that employs 10 people who earn $45,000 each, the employer will be obligated to pay almost $8,000 per year in additional pension contributions.
According to a recent survey conducted by the Ontario Chamber, 72 percent of businesses in the province believe that pension reform should be a priority for government. However, the same businesses are also clear about their concern for Ontario’s broader economic picture, in which the economy is projected to grow slowly for the foreseeable future.
Thunder Bay Chamber President Charla Robinson says, “Employers are worried that by making it more expensive to hire, the new pension plan will have a negative impact on job creation and hurt Ontario’s competitiveness. Combined with increases in electricity prices and high WSIB rates, the new pension plan will burden businesses that are already struggling to meet the rising costs of doing business in Ontario.”
The Ontario Chamber of Commerce recently submitted a letter to the Government of Ontario, asking for responses to a number of crucial questions: What will be the impact of a fully-implemented ORPP? What happens when a business can’t afford to meet the requirements of the ORPP? How much will it cost to administer a standalone provincial plan? Businesses across the province are looking for answers to these questions to help understand the impacts of the new ORPP to our economy.
The Government also introduced the Pooled Registered Pension Plans Act which will allow Ontario businesses to offer Pooled Registered Pension Plans (PRPPs) to their employees, as well as make them available to the self-employed. The Chamber is broadly supportive of PRPPs as they provide a voluntary, low-cost and tax assisted savings option that leverages the province’s existing pension infrastructure and does not require creation of a new pension bureaucracy.