Entries in ORPP (16)

Wednesday
Sep232015

Greater Peterborough Chamber of Commerce and a coalition of employers call for clarity and express deep concern over proposed Ontario pension plan

PETERBOROUGH, SEPTEMBER 23, 2015: The Greater Peterborough Chamber of Commerce, Ontario Chamber of Commerce (OCC), and a coalition of major Ontario employers are calling on the provincial government to outline to the employer community the details of the Ontario Retirement Pension Plan. In a letter addressed to Premier Kathleen Wynne, a coalition of more than 150 organizations laid out five specific questions that reflect the collective concerns of Ontario employers.

“The Greater Peterborough Chamber of Commerce and Ontario’s employer community know that without greater clarity, the proposed pension plan could have a direct, negative impact on jobs and the economy,” said Stuart Harrison, President & CEO, Peterborough Chamber. “This is why we continue to advocate for a solution that supports business growth. The concerns summarized in today’s letter illustrate that we have not yet found that solution.”

The primary concern of the employer community remains with the ORPP’s potential economic impact. Businesses in the province face increasing costs from a number of sources - rising electricity rates, a new cap and trade system, and some of the highest workplace safety insurance premiums in the country. There is deep concern that the proposed pension plan will further contribute to this cumulative burden. This joint letter followed the government’s recent revision to the proposed plan’s comparability rules under the ORPP, which now include defined contribution (DC) pension plans with a combined contribution rate of 8 percent and where the employer contributes at least 4 percent.

The coalition includes employers of all sizes, in addition to companies across a diverse range of sectors, including construction, insurance, manufacturing, and mining. More than 40 organizations across the Chamber Network have also signed on, in addition to industry and trade associations. Other questions that need to be addressed are: 

  • How will the ORPP impact Ontario’s GDP, jobs, and investment?
  • What assumptions has the Government made to arrive at its revised definition of comparability?
  • How will the government ensure that the ORPP is a cost-effective plan?
  • How will Pooled Registered Pension Plans (PRPPs) be implemented while preserving their advantages for employers?

“Government is moving ahead with a brisk timeline and some employers will begin making ORPP contributions in less than 18 months,” added Allan O’Dette, President & CEO, OCC. “With so much uncertainty around plan components, Ontario businesses are not ready. We are concerned that a lack of clarity means that the Government doesn’t have answers for the very important questions which remain unresolved.”

“The Peterborough Chamber and Ontario employers will continue to work with the provincial government to find a solution that will meet the needs of Ontario’s business community while addressing the challenges Ontarians face later in life,” adds Harrison.

For a copy of the full letter, visit the OCC website.

Wednesday
Aug192015

The ORPP: comparing apples and oranges?

Last week the Government of Ontario announced a few new rules to the Ontario Retirement Pension Plan (ORPP).  

Key Details of the Announcement:

  1. Businesses that offer a Defined Contribution (DC) plan with a total combined contribution rate of 8%, where at least 4% is contributed by the employer, will not have to pay into the ORPP.
  2. Those businesses that offer a non-comparable type of pension plan or do not offer any type of pension plan will have to contribute to the ORPP.
  3. Large employers (500 or more employees) will start contributing in 2017, medium sized employers (approximately 50-499 employees) in 2018, and small employers (50 or fewer employees) in 2019. Any employer that offers a non-comparable Defined Benefit (DB) or DC plan has until 2020 to bring their current plan in line or they will have to make contributions to the ORPP starting in 2020.

As mentioned in a press release by the Peterborough and Ontario Chambers of Commerc, the announcement is a step in the right direction for Ontario businesses in that the government has responded to the business community’s concerns by broadening its definition of a “comparable” pension plan.  

However, we remain concerned that the ORPP, in its current form, will raise costs for the majority of businesses who operate in the province, including those employers that offer non-comparable plans like Group RRSPs. Recent OCC survey data indicates that if faced with mandatory increased contributions under the ORPP, 44 percent of businesses would reduce their current payroll or hire fewer employees in the future.  

The crux of the comparability issue is that the ORPP is a defined benefit plan and most employers today offer their employees defined contribution plans.  Interestingly enough, the Government of Ontario, in its Key Design Question document on ORPP, states that for small and medium-sized businesses workplace pension plans, especially defined benefit plans, can be costly and difficult to administer.  

Defined Benefit (DB) plan: A pension plan with a guaranteed benefit amount at withdrawal

Defined Contribution (DC) plan: A pension plan with a guaranteed contribution amount; the output is dependent on the market at time of withdrawal, as is an RRSP.  

One local employer offers a voluntary program where employees contribute 3% and they match that amount for a total savings of 6%.  Under the new rules this employer has to make a decision on how to move forward.  The employer would have to increase their defined contribution plan by two percent and make it a mandatory program, keep the current program as is and start paying into the ORPP as well (the proposed ORPP is a combined employer/employee contribution to a total of 3.8%), or scrap their current plan and continue only with the ORPP.  

So why is the Government of Ontario considering a defined benefit plan?  They have said that the ORPP will mirror the CPP, which is a defined benefit plan and given the number of people that would be involved, size also becomes a mitigating factor.  However, a number of questions still remain.  We still don’t know the full administrative costs of the ORPP, the government is dealing with a large fiscal deficit and what measures are in place should the plan fall on hard times and the money isn’t there for the defined benefit?  

The Peterborough Chamber, along with the Ontario Chamber of Commerce has asked the government to conduct an economic impact analysis of their proposed pension plan and publicly release the results.

“We remain deeply concerned about the cumulative burden facing Ontario employers,” says Stuart Harrison, President & CEO, Greater Peterborough Chamber of Commerce. “Rising electricity prices, the introduction of a cap and trade system, and the ORPP will further add to the cost of doing business in Ontario. 

Following considerable advocacy efforts by a coalition of businesses led by the Ontario Chamber of Commerce, the government has committed to releasing a cost-benefit analysis of the ORPP before the end of the year.

There are still a number of questions that remain around the ORPP program including how the self-employed will be affected.  The Government of Ontario has not yet defined the rules, but has released the following: 

“Our goal is for every employee in Ontario to be part of the ORPP or a comparable workplace pension plan by 2020. That includes the self-employed.  Unfortunately, the federal Income Tax Act (ITA) does not currently allow self-employed individuals to participate in registered pension plans. We have asked the federal government to amend the ITA to allow for the self-employed to participate in the ORPP. The province will continue to explore options to enable the participation of the self-employed in the ORPP.”

Knowing that there are still a number of questions to be answered, “we will work with government in order to ensure they have a full appreciation of the potential impacts of the ORPP,” says Harrison.  

Comment through the "Peterborough Chamber" group of LinkedIn. 

Tuesday
Aug112015

Government Announces New ORPP Comparability Rules: What Businesses Need To Know

                                                        


OCC RAPID POLICY UPDATE

Today, the Government of Ontario responded to the Ontario Chamber of Commerce's (OCC) call to revise the comparability rules under the proposed Ontario Retirement Pension Plan (ORPP). The changes announced today will expand the comparability rules under the ORPP and extend the plan's phase-in period.
 

Key Details of the Announcement

  1. Businesses who offer a Defined Contribution (DC) plan with a total combined contribution rate of 8%, where at least 4% is contributed by the employer, will not have to pay into the ORPP.
  2. Those businesses who offer a non-comparable type of pension plan or do not offer any type of pension plan will have to contribute to the ORPP.
  3. Large employers (500 or more employees) will start contributing in 2017, medium sized employers (approximately 50-499 employees) in 2018, and small employers (50 or fewer employees) in 2019. Any employer that offers a non-comparable Defined Benefit (DB) or DC plan will begin to make contributions in 2020.
 

Our Position

Today’s announcement is a step in the right direction for Ontario businesses. The government has responded to the business community’s concerns by broadening its definition of a “comparable” pension plan.

However, we remain concerned that the ORPP, in its current form, will raise costs for the majority of businesses who operate in the province, including those employers that offer non-comparable plans like Group RRSPs. Recent OCC survey data indicates that if faced with mandatory increased contributions under the ORPP, 44 percent of businesses would reduce their current payroll or hire fewer employees in the future.
 

What’s Next?

The OCC will continue to work with the government to ensure that they have a full appreciation of the potential impacts of the ORPP. In addition, we encourage the government to continue conducting consultations with the business community over the coming months.
Friday
Jun052015

A Summary of Legislation Passed at Queen's Park in the Spring Sitting

Yesterday, the Legislative Assembly of Ontario rose for summer break and will resume sitting on September 14. With the 2015 Ontario Budget passing the legislature on June 3, we have written a summary of the government’s spring session and highlighted how the Chamber Network has helped shape policy.


In short, the passing of the 2015 Ontario Budget provides a very clear reminder that the cumulative regulatory burden poses a significant challenge to Ontario businesses. Over the past few months, the OCC has advocated for a business climate that fosters investment and growth through our submissions to government on issues like the review of the Ontario College of Trades, cap and trade, and the Ontario Retirement Pension Plan.

The following is a breakdown of some of the major pieces of legislation that have been passed over the spring legislative session.


Ontario to Roll Out a Cap and Trade System
April 13

On April 13, 2015 the government announced its intention to move forward on a cap and trade system to reduce greenhouse gas emissions (GHGs).

With the support of over 30 chambers of commerce and boards of trade, our network outlined its initial concerns with the cap and trade system through a written submission to government.

The OCC will continue to work with government to ensure they consider the impact that the cap and trade system will have on the economy and job creation. We are in the initial stages of determining an impactful approach on this file.
 

Ontario Retirement Pension Plan Enters Design Stage
April 29

On April 29, 2015, the Ontario Retirement Pension Plan Act was passed. The Act forms the foundation of the Ontario Retirement Pension Plan (ORPP), which is slated to take effect by January 1, 2017.

The Chamber Network has been relentless in challenging government over the ORPP. In a huge win for the Chamber Network, the government has already agreed to our request that the plan be submitted to a full cost-benefit analysis.

Just this week, the OCC sent a letter to Premier Wynne signed by over 150 businesses, sector associations, chambers of commerce, and boards of trade that urges the government to expand its definition of pension plan comparability. The Chamber Network continues to lead the conversation on the ORPP.
 

Pooled Registered Pension Plans Bill Passes the Legislature
May 26

The Pooled Registered Pension Plans Act was passed on May 26, 2015. The Act creates a framework for Ontario businesses to offer Pooled Registered Pension Plans (PRPPs) to their employees, as well as make PRPPs available to the self-employed. PRPPs offer a voluntary, low-cost, tax-assisted option to increase retirement savings.

This is a big win for the Chamber Network. The OCC has been pushing government to adopt a PRPP regime for many years.
 

2015 Ontario Budget Passes the Legislature
June 3

The Budget’s centrepiece was a $130 billion commitment over 10 years to build key long-term transportation and other infrastructure projects. The Chamber Network praised the government for their investments in infrastructure, but noted that too little progress is being made to combat Ontario’s $10 billion deficit.

The budget also formalized plans to sell a portion of Hydro One, the province’s largest electricity distribution utility. For the past several years, the OCC has been calling on the provincial government to ensure it is maximizing the value of its assets, including Hydro One. The OCC will be monitoring the situation closely to ensure that the sale of hydro utilities do not adversely affect electricity rates.
 

Comment through the "Peterborough Chamber" group of LinkedIn.

Wednesday
May202015

OCC: Regulatory Update - Spring 2015

The Ontario Chamber of Commerce's (OCC) quarterly Regulatory Updatesummarizes what employers need to know about the latest changes to the regulatory environment for businesses. Easing the regulatory burden for Ontario businesses is one of our top priorities. We are committed to continuing to advocate for a business climate that fosters investment and growth.

Direct Employer Access to ‘Express Entry’ Applicants Now Available

Employers now have direct access to Express Entry (EE) applicants through Job Match, a revamped version of Job Bank, the federal government's job database. Job Match facilitates direct connections between employers and candidates.

This follows the launch of EE earlier this year. EE is the federal government's new electronic application management system for recruiting highly skilled immigrants. The system puts employers front and centre in the immigrant selection process.

To access Job Match, visit: http://bit.ly/1EpsQxM

Learn More: http://www.cic.gc.ca/english/resources/publications/employers/express-entry-presentation-fall2014.asp

New Employment Standards Poster Requirement in Effect This Month
In effect May 20, 2015

Starting May 20, 2015, employers in Ontario must provide all current employees with a copy of version 6.0 of the Ministry of Labour’s Employment Standards Poster within 30 days. Any new employees hired after May 20, 2015 must be given a copy within 30 days of their date of hire. Ministry-prepared translations of the poster are available.

Learn more: http://www.labour.gov.on.ca/english/es/pubs/poster.php

Ministry of Labour Consulting to Address the Changing Nature of the Workplace
June and July 2015

The government has launched public consultations on the changing nature of the modern workplace. The consultations will focus on how the Labour Relations Act, 1995 and Employment Standards Act, 2000 could be amended to keep pace with the changing needs of workers and employers.

The consultations will address a number of topics, including the increase in non-standard working relationships (e.g. part-time work and self-employment) and accelerating technological change.

Consultations will be taking place in June and July in the following communities:

  • Toronto – June 16
  • Ottawa – June 18
  • Mississauga – June 24
  • Guelph – June 25
  • Windsor – July 7
  • London – July 8

Learn More: http://www.labour.gov.on.ca/english/about/workplace/consultation.php

Minimum Wage Set to Increase Later This Year
In effect October 1, 2015

Ontario is raising the general minimum wage from $11 to $11.25 per hour, effective October 1, 2015. Minimum wage rates for jobs in special categories (liquor servers, homeworkers, students, etc.) are also increasing at the same time.

Learn More: http://www.labour.gov.on.ca/english/es/pubs/guide/minwage.php?ww_newsFlashID=446FBD61-A7C2-A6DE-6675-FCDF4FD4CBBF

Workplace Safety and Insurance Board (WSIB) Consulting on Rate Reform
Submissions due June 30, 2015

The WSIB is reviewing how its rates are set. They have developed a proposed preliminary Rate Framework which aims to address fundamental issues with the current employer classification structure and premium rate setting processes. They are currently consulting with employers on the framework.

Written submissions to the WSIB are due by June 30, 2015.

Learn More: http://www.wsib.on.ca/WSIBPortal/faces/WSIBDetailPage?cGUID=WSIB060197&rDef=WSIB_RD_ARTICLE&_afrLoop=3537831839977000&_afrWindowMode=0&_afrWindowId=ckls2wcz_1#%40%3FcGUID%3DWSIB060197%26_afrWindowId%3Dckls2wcz_1%26_afrLoop%3D3537831839977000%26rDef%3DWSIB_RD_ARTICLE%26_afrWindowMode%3D0%26_adf.ctrl-state%3Dckls2wcz_42

Ontario Retirement Pension Plan Bill Passed by Legislature
Ongoing

On April 29, the Ontario Retirement Pension Plan Act, 2015 was approved by the Ontario Legislature. This Act forms the foundation of the government's new Ontario Retirement Pension Plan (ORPP) and requires that the pension plan be implemented by January 1, 2017. Important details of the plan, such as which workplace pension plans will be exempt from the ORPP, have yet to be worked out.

The ORPP will be a standalone, mandatory pension plan requiring employers and employees to contribute 1.9 percent of an employee’s yearly earnings (up to a maximum of $90,000) per year. In its 2015 Budget, the government committed to establishing a body (the ORPP Administration Corporation) that will be responsible for administering the plan and investing contributions.

Before approval by the Legislature, the Act was amended to require the Minister of Finance to prepare a cost-benefit analysis of the new pension plan by the end of the calendar year.

Learn More: http://news.ontario.ca/mof/en/2015/04/bill-strengthening-retirement-security-for-millions-of-workers-passes-in-ontario-legislature.html

**Please note that this email includes hyperlinks to third party websites. Although the Ontario Chamber of Commerce (OCC) and its member Chambers of Commerce and Boards of Trade make reasonable efforts to obtain reliable content from third parties, the OCC and its member Chambers of Commerce and Boards of Trade do not guarantee the accuracy of any third party content. The OCC and its member Chambers of Commerce and Boards of Trade do not necessarily endorse the legislative or regulatory changes listed in this email.