Businesses say the Ontario Retirement Pension Plan (ORPP) could lead to hiring freezes and job losses.

The Ontario Restaurant Hotel & Motel Association, which represents more than 11,000 establishments, said the industry can’t afford any additional costs.

Tony Elenis, president and CEO of the association, noted the foodservice industry’s profit margins dropped to 4.2% in 2013 from 9.6% in 1990 due to higher food and energy costs as well as an increased minimum wage. He made the comments on Tuesday in front of the Standing Committee on Social Policy, which is holding public hearings on the ORPP this week and next week.

Read: Business, labour groups divided over ORPP

Elenis said a 1.9% increase to an industry operating at 33% labour costs is a significant new cost to absorb and it may lead to less hiring.

“Our members have told us that this will lead to trimming health benefit plans such as prescription drug and dental plans as these are typically managed and accounted under one profit and loss statement department line,” he said.

The Ontario Convenience Stores Association also warned of unintended consequences.

CEO Dave Bryans said the 1.9% employers will need to contribute on behalf of employees is likely to be a “tipping point” for the industry.

Read: What DC plan sponsors need to know about the ORPP

He predicts convenience stores may hire fewer employees, including students, who are a large part of the convenience store workforce.

“The result will be an increase in youth unemployment, increases to student debt levels, and potentially lower enrollment at Ontario universities,” Bryans said.

But not all thought the ORPP will be bad.

Louis Erlichman, Canadian research director of the International Association of Machinists & Aerospace Workers, said private employers will have trouble matching a public benefit.

“It’s actually a better deal for small employers who really have no hope of setting up a plan on their own,” he said.

Read: 4 ways to make the ORPP work

Erlichman believes the ORPP to be available to everyone. The proposed ORPP would exclude workers already participating in a DB or target benefit multi-employer pension plan.

The Congress of Union Retirees of Canada (CURC) also wants the ORPP should be universal and believes it will improve retirement security, making Ontario a better place to live and work.

“It will attract business,” said Barry Stevens, president of the CURC’s Toronto and York Region council. “This is an opportunity for all the parties to do the right thing for the workers of Ontario.”

Looking for related articles? Read more stories about the ORPP.

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

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