Ontario Pension Comparability Changes “A Step In The Right Direction”

SSM Chamber 125 Years


Sault Ste. Marie, ON: Today, the Government of Ontario announced that it will expand the comparability rules under the proposed Ontario Retirement Pension Plan (ORPP). However, business owners remain concerned about the introduction of a new pension plan and the impact it would have on the cost of doing business.

The Sault Ste. Marie Chamber of Commerce is encouraged by the government’s 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. Chamber President Monica Dale, notes that for a business to be exempt from the ORPP, their DC plan must “have a total combined contribution rate of 8%, and the employer must be contributing at least 4% of that”.

The Chamber network is also encouraged by a longer phase-in period announced today, which will help many Ontario businesses transition into the plan. The ORPP phase-in period will start with large employers (500 or more employees) in 2017 and follow with medium sized employers (approximately 50-499 employees) in 2018, and small employers (50 or fewer employees) in 2019. “These listed employers are those that offer a non-comparable pension plan (excluding non-comparable DC and Defined Benefit plans) or no pension plan at all.” said Dale. “For employers that offer the excluded non-comparable DC or Defined Benefit plan the starting date for contributions will be in 2020.”

“Today’s announcement is a step in the right direction.” said Dale. “However, we remain concerned that the ORPP in its current form will have a negative impact on business competitiveness.”

In June, the Sault Ste. Marie Chamber, the Ontario Chamber of Commerce (OCC), and a coalition of over 150 businesses, sector associations, chambers of commerce, and boards of trade came 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.

Despite today’s announcement, the Chamber warns that in its current form, the ORPP will 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 and our local businesses,” said Dale. “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, have asked 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.

Dale concludes that “In Sault Ste. Marie, we cannot afford to strain our local economy through further cost-burdens on employers. For this reason we engaged in advocacy efforts in conjunction with the OCC and other stakeholder groups in the province. The Chamber will continue to work with government in order to ensure they have a full appreciation of the potential impacts of the ORPP.”


About the Sault Ste. Marie Chamber of Commerce

The Sault Ste. Marie Chamber of Commerce has been serving the Sault since 1889.

Two years after the first Canadian Pacific railway reached Sault Ste. Marie, a group of businessmen formed an organization dedicated to community welfare and development. During the two years leading up to the Chamber’s founding railway spurred an economic boom. Business prospered, the population doubled, and on June 25, 1889 forty businessmen organized the Sault Ste. Marie Board of Trade. Today, this non-profit organization continues to serve the interests of business in a rapidly changing economy.

The Sault Ste. Marie Chamber of Commerce is funded through annual membership of its’s member businesses and agencies, enabling it to advocate on behalf of business.

Through the years, the Chamber has worked closely with the business community and various levels of government to find solutions to challenges faced by the community and has spearheaded numerous solutions.