The Government of Ontario has introduced legislation to create the Ontario Retirement Pension Plan (ORPP) and pooled registered pension plans (PRPPs).

On Monday afternoon, the province introduced the Ontario Retirement Pension Plan Act, 2014. The act would, if passed, lay out a framework for the creation of the ORPP and commit the government to establishing the plan by Jan. 1, 2017.

In the coming weeks, the government will release a consultation paper about proposed implementation details of the ORPP, with formal consultations to follow in January 2015.

Read: Questions over ORPP remain

The province also introduced the Pooled Registered Pension Plans Act, 2014, legislation that would provide a legal framework for the establishment and administration of PRPPs in Ontario.

“The retirement savings challenge is complex and requires collaboration from all sectors, as well as a range of tools to ensure a strong and stable retirement income system,” says Ontario Minister of Finance Charles Sousa. “That is why encouraging investment in voluntary retirement savings tools such as pooled registered pension plans is an important part of the government’s strategy to enhance retirement savings for all Ontarians.”

Reaction to the proposed legislation was mixed.

Read: Ontario seeks feedback on PRPPs

The Ontario Chamber of Commerce (OCC) and its network of 160 chambers in communities across the province are urging the government to defer the ORPP legislation.

“Employers worry that by making it more expensive to hire, the new pension plan will negatively impact job creation and hurt Ontario’s competitiveness,” says OCC president and CEO Allan O’Dette. “Combined with increases in electricity prices, high WSIB rates and, for many employers, a higher minimum wage, the new pension plan will burden businesses that are already struggling to meet the rising cost of doing business in Ontario.”

The Canadian Federation of Independent Business (CFIB) is also concerned about the ORPP legislation.

“Business owners tell us the main reasons for currently not offering a pension plan are high costs and administrative complexities,” says Plamen Petkov, CFIB’s Ontario vice-president. “A recent CFIB survey found that 86% of small business owners are opposed to a new mandatory pension plan, with nearly 70% saying they would freeze or cut salaries and 53% would reduce the number of jobs to cope with the added costs.”

Read: 5 pension trends to watch

The organization says its economic analysis confirms that the ORPP would increase the province’s unemployment rate by 0.5 percentage points by 2020, and reduce wages in the longer term.

However, the CFIB welcomed the introduction of PRPP legislation, noting that those plans will be an “excellent” addition to the retirement savings options for small business owners and their employees.

“We expect PRPPs to make it easier for small businesses to contribute to a retirement plan,” Petkov adds.

The Canadian Life and Health Insurance Association (CLHIA) also welcomed the introduction of PRPP legislation in Ontario.

“We firmly believe that PRPPs are what is needed to improve access to workplace pensions and improve the retirement income prospects of Ontario workers,” says CLHIA president and CEO Frank Swedlove.

Copyright © 2021 Transcontinental Media G.P. Originally published on

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John Johnston:

As a business owner, with fifteen employees, where is my portion ( 1.8%) going to come from. We are already taxed to death, high electricity costs, carbon taxes coming soon, I am already considering closing due to the high operating costs in Ontario, think this is icing on cake etc.

Thursday, January 29 at 12:23 pm | Reply

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