A survey of businesses shows that implementation of the Ontario Retirement Pension Plan (ORPP) could have negative consequences for employment in Ontario, says the Ontario Chamber of Commerce.
The survey indicates only 26% of businesses in the province believe they can shoulder the financial burden associated with the ORPP. If faced with mandatory increased contributions under the ORPP, 44% of surveyed businesses indicate that they would reduce their current payroll or hire fewer employees in the future.
In light of these findings, the Chamber is calling 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.
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.
Read: ORPP may threaten workplace plans
In a recent submission to the Government of Ontario, the Chamber 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.
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.
Employers already offering viable workplace retirement savings plans – DC plans, group RRSP – should not have to pay into the new pension plan, says Allan O’Dette, president and CEO of the Ontario Chamber of Commerce.