In its 2020 budget on Thursday, the Ontario government said it plans to permanently extend the employer health tax payroll exemption from $490,000 to $1 million.
The change is expected to save Ontario employers about $360 million in 2021/22 as they endure the economic impact of the coronavirus pandemic. “When the COVID-19 outbreak struck Ontario, the government acted quickly to help private sector employers with their 2020 payroll taxes by more than doubling the EHT payroll exemption,” stated the budget. “With this additional relief, about 90 per cent of Ontario private sector employers are exempt from paying EHT this year.”
Read: Ontario establishes tax deferrals, special payments to support employers, workers
In light of economic uncertainty arising from the pandemic, the government is also reviewing the ability of the pension benefits guarantee fund to protect pension benefits.
In the event that an eligible defined benefit pension plan is unable to provide the promised benefits, the fund guarantees the first $1,500 per month per member. The budget noted the outcome of this review will be reported in the 2021 budget.
The government will also look at consolidating two smaller agency pension plans into the Public Service Pension Plan, a move that’s expected to save about $19 million by the end of 2020, with ongoing savings to follow.
“Like private pension plans, public sector pension plans face challenges from low interest rates, investment volatility, longevity improvements and membership maturation,” said the budget. “The consolidation of smaller pension plans with larger pension plans is one strategy that supports the sustainability and affordability of public sector pension plans and can be used to help address the challenges facing these plans.”
The budget also proposed amendments to the Pension Benefits Act to support the continued development of a target-benefit framework, a move it first announced in its 2019 budget.
Read: Pension and benefits highlights from Ontario’s 2019 budget
And as the pandemic continues to pose challenges for workplaces, the province is hiring 98 new occupational health and safety inspectors while providing coronavirus guidance resources for employers, including sector-specific safety guidelines, videos, posters and a safety plan template.
“The government is renewing Ontario’s occupational health and safety strategy for 2021 to 2026, to ensure that workplaces practice health and safety in their everyday work,” noted the budget. “The strategy will use the best evidence available to improve training, knowledge and practices, help workers and employers meet their responsibilities and make safety easier to achieve for small businesses.
“A key part of the strategy will be preventing workplace fatalities, injuries and illnesses including infectious diseases such as COVID-19.”
Read: Considerations around employee safety, privacy, leave during the coronavirus crisis