MPP Randy Pettapiece says the Liberal government is turning a deaf ear to local businesses and employees concerned about its Ontario Retirement Pension Plan (ORPP).
However, government officials say the Conservative member is using misinformation to make his case.
In May, Pettapiece held public information meetings on the ORPP in Stratford and Mount Forest, where he says people expressed “wide-ranging concerns about the government’s plan to impose a new payroll tax of up to 1.9 per cent.”
On June 30, Pettapiece followed up with an open letter to Associate Minister of Finance Mitzie Hunter, the minister responsible for the ORPP.
“Your own government’s estimates show that every $6 billion the ORPP payroll tax collects will translate into some 54,000 lost jobs,” Pettapiece stated in a press release quoting from the letter.
However ministry communications advisor Clancy Zeifman, a spokesperson for Hunter, said the estimates Pettapiece refers to come from dated and unrelated research.
“The document being referred to is a two-year-old report looking at revenue tools for transportation investment. The government rejected this specific tool and the document makes no mention of, nor has anything to do with, the ORPP,” stated Zeifman in an email.
He added, “There is considerable evidence indicating that enhanced retirement savings would be good for the economy in the long run. Economists like former Bank of Canada governor David Dodge have said that the short-term impact of an enhancement like this would be offset by the long-term gains to the economy.
“As well, internal documents from the federal Ministry of Finance show that CPP enhancement would be a good thing for the long-term health of the Canadian economy.”
Pettapiece said small businesses stand to be hardest hit by the ORPP and many are just breaking even as it is.
“Many of those will have to stop hiring or reduce benefits when the ORPP comes into effect,” he said.
The MPP said the government is “ignoring the impact on not-for-profits, including charities, churches and community organizations” represented at the information meetings.
“As many of them rely on donations, membership fees and government funding, they simply do not have the means to cover this new expense.”
Pettapiece also contends that although Hunter came to Stratford in February to conduct hearings on the ORPP, the government made little effort to publicize that event in advance “except to those already supportive of the government’s plans.
“The business community was all but shut out,” Pettapiece stated.
Government working with business
Zeifman said the government “remains committed to working with business as we move forward with the implementation of the ORPP.”
He added, “Throughout the public consultation we hosted earlier this year, Minister Hunter held community consultations in more than 10 municipalities, participated in roundtables with a range of sectors from business to agriculture to non-profits, and met with the Ontario Chamber of Commerce and local chambers several times. Additionally, the Ministry of Finance received over a thousand written submissions.”
Zeifman said the government is currently in the process of analyzing feedback “in order to ensure we create the best plan possible for the people of the province.”
To help businesses adjust, he notes, enrolment in the ORPP would occur in stages, beginning with the largest employers.
Contributions would be phased in over two years, Zeifman pointed out.
As well, the ORPP will be implemented in 2017 to coincide with expected reductions in Employment Insurance premiums.
Pettapiece said he informed the minister in his letter that many of his constituents “were surprised that although they could be paying into the ORPP for the rest of their career, they may never receive any benefits.
“With a 40-year contribution time frame, you will be taxing employers and employees, leaving them with even less to save for their own retirements,” Pettapiece wrote to Hunter.
Zeifman said the 40-year time frame reference is “erroneous” (some of the government’s promotional material used examples of potential payouts based on people who paid premiums for 40 years), and that everyone who contributes to the plan will receive benefits.
“It is incorrect to say that you have to pay into the plan for 40 years in order to receive the benefit,” Zeifman told the Advertiser in a telephone interview.
“It is a true pension plan. You pay into it for a certain amount of time and in the end you get a certain amount of money based on what you paid into it and for how long.”
