MEDIA RELEASE - Sault Ste. Marie Chamber of Commerce says businesses are concerned about Ontario pension plan
For Immediate Release
October 16th, 2014
Sault Ste. Marie Chamber of Commerce says businesses
are concerned about Ontario pension plan
Sault Ste. Marie, ON – The Sault Ste. Marie Chamber of Commerce is concerned that Ontario’s proposed pension plan will negatively impact economic competitiveness and job creation in Sault. Ste. Marie. The Chamber is joining a coalition of over 50 chambers of commerce and boards of trade from across the province in voicing its concern to the Government of Ontario.
The Government of Ontario is planning to move ahead with its plans to implement a new pension scheme for the province. The Ontario Retirement Pension Plan (ORPP), which aims to supplement the Canada Pension Plan (CPP), will require employers to match employee pension contributions, increasing their cost of doing business. For example, in the case of a business that employs 10 people with an average salary of $45,000, the employer will be obligated to pay almost $8,000 per year in additional pension contributions.
According to a recent Ontario Chamber of Commerce survey, 72 percent of businesses in the province believe that pension reform should be a priority for government. However, the same businesses have also been clear about their concern for Ontario’s broader economic picture, in which the economy is projected to grow slowly for the foreseeable future.
Local businesses, for their part, worry about the cumulative impact that government regulatory and legislative changes will have on their competitiveness.
“Our members are worried about the costs that a new mandatory pension plan would impose on them,” says Mark Barsanti, President of the Sault Ste. Marie Chamber of Commerce. “Combined with increases in electricity costs, high WSIB rates, and in some employers’ cases a higher minimum wage, the new pension plan will burden businesses that are already struggling to meet the costs of doing business in Ontario.”
“Businesses in our area are wary of any increase in payroll taxes.”
The proposed pension plan comes at a difficult time for Sault Ste. Marie and Northeast Ontario, where the region's unemployment rate has risen by 0.6 percentage points over the past year.
In its letter to the provincial government, the Chamber calls on the Government of Ontario to provide employers with answers to a number of crucial, but unanswered 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? What about the self-employed?” asks Barsanti “Businesses in Sault. Ste. Marie are seeking answers to these questions.”
“The retirement income challenge is a real one,” says Allan O’Dette, President & CEO of the Ontario Chamber of Commerce. “But we need to ensure that any changes to the pension system are made with a full understanding of their impact on Ontario's business climate.”