Ontario pension comparability changes “a step in the right direction”: Chamber

Although the Government of Ontario announced on August 10 that it will expand the comparability rules under the proposed Ontario Retirement Pension Plan (ORPP), business owners remain concerned about the introduction of a new pension plan and the impact it would have on the cost of doing business.

“This announcement is a step in the right direction,” said Kurt Bigeau, incoming 2015-2016 president of the Timmins Chamber of Commerce.

“However, we remain concerned that the ORPP in its current form will have a negative impact on business competitiveness.”

In recent months, the Timmins Chamber, the Ontario Chamber of Commerce (OCC), and a coalition of over 150 businesses, sector associations, chambers of commerce, and boards of trade have come together to urge the government to expand its definition of pension plan comparability to include capital accumulation plans, including, but not limited to, Defined Contribution plans.

As such, the Timmins Chamber of Commerce is encouraged by the government’s August 10 decision to expand the definition of comparability under the ORPP to include some Defined Contribution (DC) plans. With this change, employers that already provide certain DC pension plans for their employees will be exempt from contributing to the ORPP.

The Timmins Chamber is also encouraged by a longer phase-in period – as also announced August 10 — which will help many Ontario businesses transition into the plan.

Despite this recent announcement, the Timmins Chamber warns that in its current form, the ORPP will still 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.

“We remain deeply concerned about the cumulative burden facing Ontario employers,” said Bigeau. “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. This is why we, along with the Ontario Chamber of Commerce, continue to ask the government to conduct and publicly release the results of an economic impact analysis of their proposed pension plan.”

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

“We will continue to work with government in order to ensure they have a full appreciation of the potential impacts of the ORPP,” said Bigeau.