Entries in OCC (12)

Monday
Nov032014

Peterborough Chamber Sounding Alarm on Ontario’s Debt and Deficit 

 

Ontarians should be very concerned about the province’s fiscal situation, according to a new report from the Ontario Chamber of Commerce and the Greater Peterborough Chamber of Commerce.

The report, How Bad Is It? What Do We Do About It?, provides a straightforward account of Ontario’s current fiscal situation. It finds that while Ontario's fiscal situation is better than that of many other countries facing fiscal problems, the province is likely to reach a state of crisis unless it cuts spending and changes the ways it does business.   

The report finds that Ontario’s history of spending is unsustainable. In only seven of the past 25 years has the government balanced its books or achieved a surplus. As a result, the province has been digging itself deeper and deeper into the red. By 2016-17, interest payments to service the provincial debt are projected to consume ten cents of every dollar the government spends. 

According to the authors, a tipping point may be closer than Ontarians think. With a slower growth future projected for the province, combined with the growing demands of a rapidly aging population, the need to deal with the fiscal situation now becomes all the more urgent.  

A sustained state of poor fiscal health can hurt business confidence and makes the province a less attractive place to invest. According to a recent Ontario Chamber of Commerce survey, 93 percent of businesses in the province believe that eliminating the deficit should be a top priority for government. 

The authors also recognize the need for a solid partnership with the federal government that delivers on the need for more principled federal transfers. 

And as the authors conclude, the
approaches mentioned above “offer
opportunity to reduce government spending and to reshape government programs and services to increase the public’s return on investment.”   They can also “set the province on a path toward fiscal sustainability.”

What makes this report worth buying into is the idea that not any one
approach is the ultimate solution, but that there has to be a knowingness and willingness to use an approach that improves the business climate and improves the government’s ability to focus on key priorities.  

Read the Full Report

Comment through the "Peterborough Chamber" group of LinkedIn.

Friday
Oct242014

Government announces independent review of Ontario College of Trades, pauses trade classification

On Thursday, October 23, 2014, the Government of Ontario announced the appointment of Tony Dean, former Secretary of Cabinet and Head of Ontario Public Service, to lead an independent review of the Ontario College of Trades and other key areas of Ontario's skilled trades system.

Included under the purview of the review will be issues related to the scope of practice performed by a tradesperson, as well as the process for the classification of compulsory versus voluntary trades. Findings will be presented to both the Ontario Ministry of Training, Colleges, and Universities and the College of Trades in October 2015.

The Government of Ontario also announced that all trade classification reviews will be paused during the duration of Mr. Dean's review. Currently, the College is mandated to consider applications that seek to change the certification of trades from voluntary to compulsory. A compulsory trade is one in which workers must acquire a certificate of qualification from a government-accredited school in order to perform work in that trade. Workers in trades classified as compulsory must pay the College an annual membership fee of $120.

This review comes at a pivotal time. In its current form, the College is poorly positioned to deliver on many of the core elements of its mandate, which includes oversight of journeyperson-to-apprentice ratios, ensuring industry compliance and certification, and addressing labour market shortages by promoting careers in the skilled trades.

The announcement is a first step towards supporting the success of the skilled trades in the province. Over the last year, concerns have mounted over the College’s compulsory membership structure, as well as bias in the College's trade classification review process. However, the review does not touch upon other key areas of the College's mandate, including Ontario's high journeyperson-to-apprentice ratios and low apprenticeship completion rates, as well as the low number of youth entering the skilled trades as a career.

Since the College’s creation in 2009, the Ontario Chamber of Commerce and the Chamber Network have led the conversation about reforming the College of Trades. In October of 2013, the OCC released the report, Caution: Work Ahead, which highlights several serious issues facing the College and provides six recommendations that will make the College more responsive to employers’ needs.

The Ontario Chamber of Commerce will participate vigorously in the review and continue to advocate for changes in the ratio review process.

Peterborough Chamber Voice of Business Articles: 

College of Trades failing to make the grade with industry and its tradespeople - January 10, 2013 

OCC: Apprentice ratios under the microscope - March 7, 2013

OCC: Policy resolution on Ontario College of Trades now on the books - May 16, 2013

Apprenticeship ratio reviews, membership ... still a lot of questions around the Ontario College of Trades - September 19, 2013

OCC: Reform needed for the College of Trades - November 7, 2013

 

 

Wednesday
Oct082014

Greater Peterborough Chamber of Commerce says businesses are concerned about Ontario pension plan

The provincial Liberals are moving ahead with plans to install the Ontario Retirement Pension Plan (ORPP).  Businesses are concerned with the immediate and long term implications of such a program and chambers across the province, including the Greater Peterborough Chamber of Commerce, took part in a “Pension Advocacy Day” on Wednesday, October 8, 2014.   

The Peterborough Chamber and 50 other chambers across Ontario also recently signed a letter expressing the concerns of the business community.  The Ontario Chamber of Commerce (OCC), on behalf of the provincial Chamber Network, sent a letter to the Honourable Mitzie Hunter, Associate Minister of Finance. Minister Hunter has been charged with developing the framework for the ORPP.  The provincial government chose to develop this plan after the federal government refused to make any changes to the Canada Pension Plan (CPP).     

As stated in the letter, the business community is very aware that a section of the population that is not prepared for retirement and acknowledges that “significant number of retirees, who lack sufficient income to maintain their standards of living, would have serious implications on the fiscal health of Ontario.”

However, many employers believe a standalone provincial pension plan is not the best route for Ontario.  As expressed in the letter, the concern lies in the cumulative effect of a number of expected increases for employers over the next few years from soaring electricity costs to very high WSIB premiums and yet Ontario’s Ministry of Finance projects the real annual GDP to be at 2.1% for the next twenty years.  This would be down from 2.6% growth seen in the previous twenty years. 

The provincial government is still in the very early design stages of the ORPP.  Here’s what we know so far:  

  • The ORPP will require equal contributions to be shared between employers and employees, not exceeding 1.9 per cent each (3.8 per cent combined) on earnings up to a maximum annual earnings threshold of $90,000. The ORPP maximum earnings threshold would increase each year, consistent with increases to the CPP maximum earnings threshold. 

Here are some illustrative examples of how much businesses will end up paying using the known parameters: 

  • A business has five employees, all of whom make $50,000.00 annually.
    • The business will need to pay $883.50 (1.9%) per employee per year in ORPP contributions
    • The business will be paying $4,417.50 in total, per year, in ORPP contributions for its 5 employees
  • A business has 20 employees, 10 of whom make $90,000 annually, five of whom make $50,000 annually, and five of whom make $30,000 annually. 
    • The business will need to make ORPP contributions of $1,643.50 for each employee that makes $90,000, $883.50 for each employee that makes $50,000, and $503.50 for each employee that makes $30,000.
    • The business will be paying $23,370 in total, per year, in ORPP contributions for its 20 employees. (OCC Backgrounder 2014)
  • Businesses already participating in a comparable workplace pension plan would not be required to enrol in the ORPP. The government has not yet defined what it means by “comparable plan”.
  • The ORPP would be publicly administered at arm’s length from government and have a strong governance model. 

Increased costs are not the only concerns of business:   

  • Unnecessary bureaucracy
  • Fragmentation of the pension landscape 
  • Ontario is moving in a different direction on pension while other provinces are looking at using Pooled Registered Pension Plans (PRPPs) (OCC letter to Minister Hunter September 2014) 

According to the OCC survey Emerging Stronger 2014 employers are overwhelmingly in favour of Pooled Registered Pension Plans (PRPPs). These plans allow for greater flexibility in terms of employer contribution and would not be mandatory.

Starting in 2017, the ORPP will be phased in and coincide with expected reductions in Employment Insurance premiums.  The largest employers would be enrolled first and contribution rates would be phased in over two years.  

Comment through the “Peterborough Chamber” group of LinkedIn. 

Thursday
Oct022014

Canada and Ontario governments announce new job grant

Rapid Policy Update from the OCC:

What do businesses need to know?

The governments of Canada and Ontario have jointly announced the roll-out of the Canada-Ontario Job Grant, a new employer-driven skills training program.

The Job Grant will provide businesses with up to $15,000 per person to cover training costs for workers or unemployed Ontarians in needs of skills upgrading.

In order to participate in the program, employers will be required to contribute on average, one-third or up to $5,000 of the total costs of training. Small businesses will benefit from flexible arrangements, such as the potential to count wages as part of their employer contribution.

Eligible training under the Job Grant can be provided in a classroom, on-site at a workplace, or online, as long as it is provided by an eligible third-party trainer, such as a community college, career college, trade union centre, and/or private trainer.

As part of the Job Grant, the ministry is also calling for ‘expressions of interest’ for two new, employer-driven skills training pilots:

  • The Customized Training pilot will assist in the development and delivery of firm-specific training solutions that meet employers’ workforce needs.
  • UpSkill will support essential and technical skills training tailored to specific sectors for potentially vulnerable workers in low and medium-skilled occupations.

To apply for the Canada-Ontario Job Grant and learn more about the training pilots, visit the Ontario Ministry of Training, Colleges and Universities website.

The Ontario Chamber of Commerce played an instrumental role in shaping the Canada-Ontario Job Grant. In partnership with Essential Skills Ontario, the OCC recently released the report, Moving Forward Together: An Employer Perspective on the Design of Skills Training Programs in Ontario. This report presented the business perspective on employer-driven training and provided recommendations to government on how to ensure new programs are a success.

Comment through the "Peterborough Chamber" group of LinkedIn.

Thursday
Sep112014

Good news for employers on EI and WSIB premiums

FEDERAL GOVERNMENT LOWERING EMPLOYMENT INSURANCE PREMIUMS
The federal government has just announced that it will be lowering Employment Insurance (EI) premiums for small businesses, paid by employers and employees, in an effort to boost hiring at a time of sluggish growth. The government is referring to this premium reduction as the Small Business Job Credit. The freeze is expected to save small businesses more than $550 million over the next two years.
The move comes shortly after Statistics Canada reported a decline of 11,000 jobs in August. Last year, the Parliamentary Budget Officer accused the government of keeping premium rates “higher than necessary” in an effort to balance the books in the short-term.
What does this mean for business? According to the Department of Finance, businesses that pay EI premiums up to $15,000 will be eligible for the break, which reduces the premium from $1.88 to $1.60, per $100 of payroll. That is a drop of 15 percent in EI costs for eligible businesses.
Close to 90 percent of all EI premium-paying businesses in Canada will be eligible for the break. 
The Canada Revenue Agency will automatically calculate the credit on a business’ return, in an effort to 
reduce paper burden.
The OCC applauds the federal government’s decision, but continues to advocate for reforms to the EI program, particularly in how benefits are distributed regionally. Because of the program’s current structure, Ontario employers and employees end up subsidizing industries and workers in other provinces, despite the fact that Ontario’s unemployment rate is above the national average. For more information on the OCC’s proposed reforms to the EI program, read the OCC's report A Federal Agenda for Ontario.
 
WSIB PREMIUMS UNCHANGED FOR SECOND YEAR
The Government of Ontario announced that Workplace Safety Insurance Board (WSIB) premium rates would be frozen for a second consecutive year. Only one rate group, Local Government Services, will see an increase in premium rates as a result of expanded coverage for firefighters--an issue that the OCC is tracking closely.
The WSIB also announced that their compensation system is more than 64 percent funded, and will be 80 percent funded by 2022 and 100 percent by 2027. The funding ratio has improved significantly, up from 56.9 percent in 2012.
The OCC is repeating its calls for more competitive business premiums. Despite a steady decline in the frequency of work-related injuries in the province, Ontario’s average employer premium rate is still one of the highest in Canada. This is due largely to the surcharge associated with paying off the WSIB’s unfunded liability, which employers have been forced to absorb as a legacy cost.
For more information, read the OCC's agenda for WSIB reform, Caution Work Ahead.
Comment throught the "Peterborough Chamber" group of LinkedIn.