Employer fights back against ORPP

by Will Ashworth02 Dec 2015
Kitchener-based for-profit nursing care provider Care Partners has a plan to pass on its share of the costs of ORPP to its employees contrary to the government legislation which suggests ORPP’s future could be paved with social unrest.
 
“The employer proposes that if the province’s implementation of ORPP results in the employer incurring increased pension costs for this bargaining unit . . . the employer’s increased costs will be entirely offset through direct compensation savings in the collective agreement,” stated Care Partners in its proposal to the Ontario Labour Relations Board last week.”
 
Under ORPP the employer is supposed to contribute 1.9% of the employee’s annual salary and also cover the administration costs involved while the employee also contributes 1.9% to the plan annually.
 
“Employers have an obligation. We will not allow them to contract out of that obligation,” Hunter said responding to the Toronto Star’s November 26 column on ORPP. “That’s why it’s enshrined in our legislation that it’s a shared responsibility between the individuals and the employer, very much like the CPP is today.”
 
Advisors of all stripes have never been fans of ORPP dating all the way back to the Ontario government’s first mention of it in the 2014 Ontario budget in May 2014.
 
“Not too long ago they announced they would go full blast on ORPP and there’s no commitment yet from the new Prime Minister that they’re going to enhance CPP,” Kitchener advisor Mike Gentile told LHP. “Have you noticed the last little while she’s a close as she can be to Justin Trudeau just hanging on to his coattails hoping he’ll send her some cash? I just shake my head.”
 
Gentile, like many advisors, is an independent businessperson and understands the costs involved in running your own company. He fully appreciates the profitability dilemma ORPP causes.
 
“At the end of the day the company [Care Partners] goes back to their board of directors and says the profitability of this organization is at stake here,” Gentile told LHP. “You’ve got EI, CPP, benefits, and a lot of other things in the mix and then all of a sudden the provincial government comes along and says, ‘We’re going to tack on some additional costs’ and nobody even references the HST that’s piled on top of everything. As an employer if you’re able to convince your employees that they can assume the full burden, that takes the pressure off you as an employer and makes you much more profitable as an organization.”
 
Gentile might not do it but that doesn’t mean others shouldn’t. ORPP is simply a bad idea in his opinion.

COMMENTS

  • by paul 2015-12-02 12:11:17 PM

    interesting how Wynn promised she would cancel the ORPP should the Federal Liberals get elected, I guess that was just another lie on her part.

  • by Allan 2015-12-02 1:30:37 PM

    The bigger issue for the Ontarian's ORPP is targeted at is their ability to live for today. Taking 2% out of their pay to provide enhanced retirement benefit is all well and good. It doesn't help the people earning the YMPE or below pay their current bills however.

  • by Louisa 2015-12-02 5:20:32 PM

    The ORPP will apply to those without a defined benefit pension plan or a sufficiently rich defined contribution pension plan. This means group RRSP's and most of the DC plans currently in place will be dissolved. Unless of course the employer can afford to carry both plans, I wonder how many employers are planning that? This transfers jobs from the private sector to the public sector. Personally I see so much wrong with this picture. At a point in time when the debt in Ontario exceeds our national debt per capita, we need a smaller, not bigger government. The costs involved to set up, implement and monitor this plan are huge. No problem we'll just add it to our debt. This absolutely makes no sense to me to put this burden on employers when our economy is failing. Why not implement something when the economy is growing? Why does the plan have to be a defined benefit plan? Make it simple. Keep the jobs and responsibility where it belongs with the private sector. Allow group RRSPs and DCs, and implement this when the economy is growing. Wynne is going to kill whatever is left of our fragile economy.