By MPP Toby Barrett
The current government is known for floating policy that makes great headlines and soundbites in the media but not so great results when it comes to implementation.
The Ontario Retirement Pension Plan, or ORPP for short, is a recent example.
Instead of promoting financial literacy and encouraging people to make their own decisions about retirement, this job-killing payroll tax will take money away from business, and from people’s pockets – money that could be used to pay the bills or bank for retirement.
On Aug. 11, the Ontario government announced a 2017 phase-in of the ORPP for companies with 500-plus employees. Subsequently, smaller firms will be added. Both employees and employers will be required to contribute matching 1.9 per cent of gross earnings to the ORPP, for a combined close to four per cent tax on payroll. Workplaces with mandatory defined benefit pension plans will be exempt.
A multi-year phase-in period is an admission that this is a flawed policy that will hurt business and families – delaying mistakes for as long as possible.
The Canadian Federation of Independent Business, Ontario Chamber of Commerce, and their member businesses have already spoken out against the ORPP, saying it will negatively affect their competitiveness. Magna, Canadian Tire, Ford Motor Co., Chrysler and related industries have also adamantly spoken out against the payroll tax, saying it will negatively affect their competitiveness. The National Post has determined the ORPP “unsustainable” and even the premier admits she doesn’t know how much it will cost.
To put this in perspective, Ontario would end up being the only province in Canada with a provincial pension plan, as well as the federal pension. Quebec does have its own provincial plan, but it is in lieu of the Canada Pension Plan. Again, obviously putting Ontario at a competitive disadvantage when vying for industry and business to locate in Ontario or at least remain. On top of the North America’s highest electricity rates, those wanting to open doors in Ontario will have to pay close to an additional four per cent on top of their payroll.
When you have energy prices that aren’t competitive, plus suffocating red tape, it harms our economy. The ORPP only makes matters worse, and creates more uncertainty at a time when companies need stability in order to invest.
We in the Official Opposition continue to oppose the ORPP because:
* The government has not conducted a cost-benefit analysis on the ORPP
* The ORPP will make doing business in Ontario even more expensive
* The ORPP will cause more businesses to close or move
* The ORPP will cause more unemployment in Ontario.
There is the question of, do we as Ontarians want to trust a government to manage our retirement income – a government that has created the highest level of debt of any sub-sovereign jurisdiction in the world.
Another question – why do we have a premier in Ontario who has crossed the line by openly campaigning in a federal election – ostensibly to protest the federal position on pensions.
Instead of making things more difficult for families and businesses to thrive in Ontario, we should be making it easier. ORPP is certainly a step in the wrong direction.