Insights & Issues – March
The Ontario Retirement Pension Plan (ORPP) continues to be a hot topic among Chamber members. New analysis by the Ontario Chamber of Commerce (OCC) finds that the government’s plan to offset the impact of the ORPP on employers falls short. The government is timing the implementation of the ORPP to coincide with reductions in Employment Insurance (EI) and Workplace Safety and Insurance Board (WSIB) premiums, with the intention of partially offsetting the costs of new pension contributions. While the OCC supports the government’s intent, the organization’s analysis reveals that the costs of new pension contributions will still be significant.
OCC analysis finds that the average employer will face significant cost increases in 2022, the year when both EI and the first wave of WSIB reductions are in full effect. For an average employee making $30,000 a year, the employer would incur $306 in new costs; a $50,000 employee would see the employer faced with a $554 cost increase; and a $90,000 employee would see the employer faced with a $1,331 cost increase.
This analysis also demonstrates the impact that the ORPP will have on three different representative firms: a representative small, medium, and large business would see only 31 percent of the cost of the ORPP covered by EI and WSIB reductions. For employers that are not currently subject to WSIB premiums, these measures will offset even less of the cost of ORPP contributions.
The Thunder Bay Chamber and the OCC are calling for government to introduce offset measures that will mitigate the impact of the ORPP to business.