Toronto, January 26, 2016 – The Ontario government continues to ignore the warnings from its top job creators and economic drivers by moving forward with the implementation of a misguided and costly pension tax. The additional details announced today on the Ontario Retirement Pension Plan (ORPP) do nothing to help Ontario’s small businesses and their employees cope with the impact of the forced premiums they will have to start paying in a troubled economy.
“Ontario’s small business owners stand firmly against this job-killing pension tax, with 90 per cent opposing the ORPP,” said Plamen Petkov, CFIB’s Ontario vice president. “Seven in 10 said it would force them to freeze salaries, while more than half reported they would have to eliminate positions to deal with the added costs. Yet, these consequences continue to fall on deaf ears. It appears the government doesn’t really care about the economic damage being done.”
Once fully implemented, the ORPP will require every Ontarian without a workplace pension plan to pay up to $1,643 in mandatory pension premiums every year. Employers will have to match the contribution amount for each of their employees.
CFIB estimates that the ORPP will increase Ontario’s unemployment rate by 0.5 per cent by 2020, and reduce wages in the longer term. In addition, it will take 40 years for contributors to receive maximum benefits, so those hoping to collect the full ORPP pension will have to wait until 2057 at the earliest.
“With opposition to the ORPP growing, the province continues to push Ontarians to a place where they just don’t want to go. Most alarming, the province has already set up plans to increase future rates, and appears to have shifted to make the ORPP its first choice, trumping even the CPP expansion discussions that are now taking place at the national level,” added Petkov.
“Today, the government acknowledged that retirees will not benefit whatsoever from the new plan, and the near retirees will also get next-to-nothing in enhanced retirement benefits. All future government communications on the ORPP need to do the responsible thing and make that clear so Ontarians understand the impact of the plan being put before them.”
For more information or to arrange an interview with Plamen Petkov, contact Ryan Mallough at 416 222-8022 or email [email protected]
CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members across every sector and region.