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Work still needed to ensure ORPP hits mark: CME

Published by Brad Fougere on August 11, 2015

Canadian Manufacturers & Exporters remains deeply concerned with the potential impact on manufacturing in Ontario despite the revisions to the Ontario Retirement Pension Program (ORPP) under today’s announcement.

"We are pleased that the government listened to our message by proposing to expand the definition of comparability under the new Ontario Retirement Pension Plan," said CME Ontario Vice President Ian Howcroft. "We also support a longer phase-in period for those that will have to contribute to the new program."

However, while the Government expanded the definition of comparable plans that would be exempt from contributing to the new ORPP, we do not believe that the extension goes far enough for the majority of Ontario manufacturers who are already offering significant pension plans to its employees.

“We have members that provide as much as 7.5 percent employer contribution with no employee contributions that would be ineligible for comparability," Howcroft said. "That’s nearly double the ORPP combined rate and quadruple the employer rate. In our view it doesn’t make sense that this should not be comparable. Worse yet, many of these companies will be forced to abandon their own far more generous pension plans for the more expensive Ontario plan, which will leave Ontario’s one million manufacturing employees worse off."

While some Ontario manufacturers will be exempt under the new definitions, most manufacturers will ultimately face a new cost of doing business in Ontario that will negatively impact their competitiveness.

“Ontario manufacturers are constantly struggling to invest in their people, their processes and their products to be globally competitive,” added Howcroft. “The additional ORPP costs for manufacturers will reduce the amount of money they have available for investment, further deteriorating their competitive position. In the long run, if the ORPP is not revised significantly from the current proposal, it will cost jobs and economic growth in the province.”

CME will continue to work with Ontario manufacturers and exporters to reduce the cost of the ORPP and continue to call on the provincial government to implement an effective pension plan that does not negatively impact our members and their employees.

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