Entries in Pension (3)


What does business want to see in the 2015 Ontario Budget? Submission by the OCC

The Ontario Chamber of Commerce (OCC) submission outlines increasing concern with how new provincial
programs and policies are impacting Ontario’s competitiveness and job creation. Over the past year, the
Government of Ontario has implemented or announced several new initiatives that have a direct impact on business, including increases to the minimum wage, a new Waste Diversion Act, a review of the Labour Relations Act, the Ontario Retirement Pension Plan (ORPP), and a potential carbon pricing regime. The government needs to seriously consider the cumulative impact of these initiatives on business.

Addressing the fiscal situation should also continue to be top priority for the government. Eliminating the deficit is an important step the government can take to improve Ontario’s competitiveness and create jobs in the province.

The full report:  


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. 


Chambers across Ontario send letter to provincial government on pension reform





September 8, 2014
The Honourable Mitzie Hunter, MPP
Associate Minister of Finance
7th Floor, Frost Building South
7 Queen’s Park Crescent
Toronto, Ontario M7A 1Y7

Dear Associate Minister Hunter, 

As your government moves forward with the Ontario Retirement Pension Plan (ORPP), we are writing to urge you to consider how this new pension scheme will affect the province’s immediate and longterm growth. We request a meeting with you to discuss how we can work together to secure a pension future that will support both the retirement savings needs of Ontarians and Ontario’s economic recovery.

As you know, Ontario is facing a pension challenge. While a majority of Ontarians are relatively well prepared for retirement, a sizeable minority (1/4 to 1/3 of Ontarians according to varying estimates) are not adequately saving for retirement. Many of these people are middle income-earners, including almost 1.3 million workers in the province who do not have access to a pension plan in the workplace. Voluntary individual savings tools are also being underutilized.

At the same time, Ontario’s population is aging; by 2035, 23 percent of Ontarians will be of retirement age, compared with 14 percent in 2011. A significant increase in the number of retirees, who lack sufficient income to maintain their standards of living, would have serious implications for the fiscal health of Ontario.

Businesses overwhelmingly agree that the pension problem needs to be addressed. According to a recent OCC survey, 72 percent of Ontario businesses believe that pension reform should be a priority for government. As a result, the business community appreciates your government’s action on this file and the attention you have brought to this issue at the national level.

However, Ontario’s pension problem is complicated by the province’s broader economic picture. As you know, Ontario’s economy is in transition. The economy is projected to grow slowly for the foreseeable future. Ontario’s Ministry of Finance projects the province’s real annual GDP growth for the next twenty years to be 2.1 percent, down from 2.6 percent during the previous twenty years.

Employers are facing rising costs, including soaring electricity prices and high WSIB premiums, which risk stifling investment in Ontario. In this context, businesses are wary of policies that will add to their costs.

In our recent report in partnership with the Certified General Accountants of Ontario (now the Chartered Professional Accountants of Ontario), An Employer Perspective on Fixing Ontario’s Pension Problem, we aggregated the results of consultations with employers on Ontario’s pension future. From these consultations, it is clear that businesses in the province prefer a well-targeted pension solution that provides flexibility for employers and employees, and does not increase their costs unnecessarily.

Employers are overwhelmingly in favour of Pooled Registered Pension Plans (PRPPs), and as such, we applaud your government’s intention to implement PRPPs.  At the same time, employers are wary of a standalone provincial pension plan. The position of Ontario businesses is clear: they cannot incur the costs associated with a new Ontario pension plan. According to a recent OCC survey, only 23 percent of businesses are certain that they can afford the costs associated with increased employer pension contributions. Worry has also been expressed that smaller businesses, whose resources are more limited, will be disproportionately impacted when compared with larger peers and competitors.

Apart from increased costs, the following concerns regarding the ORPP were outlined by Ontario businesses: 

  • Unnecessary bureaucracy: businesses question the need for a new provincial pension bureaucracy that will duplicate and complicate an already effective and balanced national pension system based on OAS-GIS, the CPP-QPP, and private workplace retirement savings plans.
  • Fragmentation of the pension landscape: a unique provincial pension plan will add complexity and costs for employers, particularly for those who operate in more than one province.
  • National commitments to Pooled Registered Pension Plans (PRPPs): national momentum for PRPPs has already been generated, with implementation taking place at the federal level, and in Quebec, B.C., Alberta, and Saskatchewan, and a framework plan in Ontario. Why should Ontario move in a different direction, while other provinces are already moving towards PRPPs? 

In light of the concerns expressed by our member companies with respect to the ORPP, we strongly urge your government to reconsider its approach to addressing Ontario’s pension problem. Ontario’s employers need answers to crucial outstanding questions. 

  • What will be the impact of a fully-implemented ORPP? If it has not done so already, the government needs to conduct an overall impact analysis of the ORPP to fully assess the costs and benefits of the Plan from economic and social perspectives. If it has, these results should be made public. Such an impact analysis should examine the short- to long-term impact of the ORPP on business competitiveness, investment and employment/wages. The net impact on retirement saving should also be examined. What is the possibility of people saving less privately as a result of ORPP contributions (which would result in no positive net impact on retirement preparedness)?
  • How will the government treat businesses who cannot afford to match mandatory contributions under the ORPP? Will there be exemptions for small businesses? Will small businesses be directed or mandated to offer another plan (PRPP or Group RRSP) as an alternative?
  • What types of workplace pension plans will be considered “comparable” to the ORPP? The government has pledged to exempt those employees already participating in a comparable workplace pension plan from enrolling in the ORPP. If businesses decide that an alternative pension scheme, such as the PRPP, or any number of other long-standing registered pension plans is preferable to the ORPP, will they qualify as “comparable”?
  • Will the government consider broadening the diversity of sources of retirement income to mitigate risk? Experts agree that having multiple sources of retirement income through wellregulated private as well as public pensions enhances sustainability and reduces the risk of a retirement income shortfall. The Organisation for Economic Co-operation and Development (OECD) and other expert groups have underscored the strength of balanced public-private pillar based pension systems such as what we have here in Canada. Will a mandatory ORPP scheme provide a desirable level of diversification for Ontarians’ sources of retirement income, and would the relative balance of the retirement savings system be impacted?
  • How will you address worker mobility issues? What happens to the ORPP contributions of employers and employees if employees are required to move out of the province, or if they transfer to workplaces in Ontario that already offer a registered workplace plan (or PRPP)? Will this increase the already significant red tape burden for businesses?
  • How will the ORPP impact the self-employed? Self-employed individuals often face a greater degree of income variability. While savings vehicles like the PRPP provide flexibility in terms of employer contributions, it is not clear that the ORPP would do the same. 

To respond to these comments and to provide you direct access to representatives of businesses across the province, we invite you to participate in a teleconference call with Ontario’s chambers of commerce and boards of trade in September. Participants in our network teleconferences include executives from chambers of commerce and boards of trade from across the province, who have a clear sense of business priorities in their communities.

We look forward to discussing this issue with you further in the near future. To get in touch, please contact Josh Hjartarson, Vice President, Policy & Government Relations, at 416.482.5222 ext. 2320, or by email at joshhjartarson@occ.on.ca.

Thank you, 

Mark Nibourg - Greater Arnprior Chamber of Commerce

Corey Bilton - Arthur & District Chamber of Commerce

Monika Rogers - Beaverton District Chamber of Commerce

Bill Saunders - Belleville & District Chamber of Commerce

James McNeill - Bradford Board of Trade

Steve Sheils - Brampton Board of Trade

Keith Hoey - Burlington Chamber of Commerce

Jim DiNovo - Brantford Brant Chamber of Commerce

Anne MacDonald - Brockville & District Chamber of Commerce

Valerie Arnold-Judge - Caledon Chamber of Commerce

Greg Durocher - Cambridge Chamber of Commerce

Roberta Scarrow - Centre Wellington Chamber of Commerce

Gail Bishop - Chatham-Kent Chamber of Commerce

Kevin Hargreaves - Cornwall & Area Chamber of Commerce

Arend Kersten - Flamborough Chamber of Commerce

Keanin Loomis - Hamilton Chamber of Commerce

Adam Ward - Hanover Chamber of Commerce

Kathleen Dills - Halton Hills Chamber of Commerce

Nicole Middelkamp-Hope - Huron Chamber of Commerce

Ann Campbell - Ingersoll District Chamber of Commerce

Wes Romaniuk - Kenora & District Chamber of Commerce

John Sawyer - Oakville Chamber of Commerce

Kevin Ward - Northumberland Central Chamber of Commerce

Allan O’Dette - Ontario Chamber of Commerce

Gerry Macartney - London Chamber of Commerce

Debra Scott - Newmarket Chamber of Commerce

Sharon D’Arcey - North Perth Chamber of Commerce

Andrew Ryeland - Parry Sound Area Chamber of Commerce

Bert Loopstra - Owen Sound District Chamber of Commerce

Bob Malcolmson - Greater Oshawa Chamber of Commerce

Pat Wiseman - Perth & District Chamber of Commerce

Stuart Harrison - Greater Peterborough Chamber of Commerce

Bree Nixon - Port Hope & District Chamber of Commerce

Wendy Parsons - Leamington District Chamber of Commerce

Travis Crawford - Kincardine & District Chamber of Commerce

Bill Hughes - Greater Kingston Chamber of Commerce

Dave Ashton - Prince Edward County Chamber of Tourism & Commerce

Suzanne Andrews - Quinte West Chamber of Commerce

Leslie Whidden - Richmond Hill Chamber of Commerce

Dave Cage - Stoney Creek Chamber of Commerce

Garry Lobsinger - Stratford & District Chamber of Commerce

Bob Hammersley - St. Thomas & District Chamber of Commerce

Marianne Braid - Southeast Georgian Bay Chamber of Commerce

Stephen Boles - South Huron Chamber of Commerce

Debbi Nicholson - Greater Sudbury Chamber of Commerce

Suzanne Renken - Tillsonburg District Chamber of Commerce

Charla Robinson - Thunder Bay Chamber of Commerce

Phil Barton - Timmins Chamber of Commerce

Nicole Couwenberg - Township of Norwich Chamber of Commerce

Jeff Hamilton - Trent Hills & District Chamber of Commerce

Matt Marchand - Windsor Essex Chamber of Commerce

Comment through the "Peterborough Chamber" group of LinkedIn.