Federal and Provincial Agreement on Pension Reform May Not Be Good for Business – Greater Niagara Chamber

 “Employers in Niagara are suffering under increasing costs of doing business. We are concerned that additional mandatory pension contributions will add to these burdens.”                             — Mishka Balsom, President & CEO, Greater Niagara Chamber of Commerce

An Analysis from the Greater Niagara Chamber of Commerce
Posted June 22nd, 2016 on Niagara At Large

Niagara, Ontario – The Government of Canada, at a meeting with representatives of the governments of British Columbia, Alberta, Saskatchewan, Ontario, Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador, has come to an agreement in principle over expanding the Canada Pension Plan, or CPP. Quebec and Manitoba have agreed to remain part of future discussions.greater niagara chamber

The Government of Ontario had previously committed to enacting the Ontario Retirement Pension Plan, or ORPP, at the provincial level. The business community and the Chamber network were apprehensive about the Plan, citing increased costs that essentially functioned as a payroll tax at a time when the cost of doing business in Ontario was already steep and increasing. The provincial government has repeatedly stated that it would abandon the ORPP if it felt there was a suitable replacement at the federal level, however.

Now that the federal and provincial governments have reached this agreement in principle, it appears that the ORPP is off the table. The new agreement is an improvement, and will certainly save Canadian taxpayers in overheads, administrative costs, and potential overruns, since the CPP is building on existing administration rather than creating it from whole cloth. The longer and more gradual roll-out period will also make it easier for businesses to adjust than the ORPP would have.

However, the new agreement is not ideal for Canada’s businesses, as it still proposes mandatory increased costs that will practically function as a payroll tax for employers and employees alike. While the situation is somewhat better for businesses in Ontario, who were looking at increased costs through the ORPP and have now had something of a reprieve, it is worse for businesses elsewhere in Canada, now anticipating brand-new payroll expenses.

In partnership with the Ontario and Canadian Chambers of Commerce, our advocacy to governments at both levels stressed that businesses were incurring increasing costs, and we asked that government not add additional burdens on top.

We suggested that pension reform would be best tackled by a voluntary option for employees to contribute more to their own retirements, rather than a mandatory requirement for employees and employers to contribute alike.

Policy alternatives such as more options for tax-free savings and investment, or tax incentives for employers to offer pension schemes as part of an employee benefits plan, would also have been good choices. In all cases, the policy direction is the same: Canadians and Canadian businesses would retain the option to decide what is best for themselves.

After all, a recent survey showed that more than four in every five Canadian households are in a good financial position for retirement, even amongst reports of increasing personal debt and decreasing saving. Increasing pension contributions for every worker and every business in Canada to cover the 17% who are less than comfortable is a blanket solution to what is not a general problem.

We would hope, at the least, that the Canadian and Ontario governments would offset some of these costs for business by making a serious effort to lower electricity and energy prices, for instance, or to reverse recent cuts to tax credits for research and development. The GNCC has lobbied for both of these, and will continue to do so. We will endeavour to remain a part of the conversation on pension reform, and are committed to representing the interests of the Niagara business community in that conversation.


“Employers in Niagara are suffering under increasing costs of doing business. We are concerned that additional mandatory pension contributions will add to these burdens. Governments must be aware that every additional cost they impose on business risks job losses.” — Mishka Balsom, President & CEO, Greater Niagara Chamber of Commerce

The Greater Niagara Chamber of Commerce is the champion for the Niagara business community. With almost 1,600 members representing 50,000 employees, it is the largest business organization in Niagara and the third largest Chamber in Ontario. The Chamber Accreditation Council of Canada has recognized the Greater Niagara Chamber of Commerce with its highest level of distinction.

NOW IT IS YOUR TURN. Niagara At Large encourages you to share your views on this post. A reminder that we only post comments by individuals who share their first and last name with them.

Visit Niagara At Large at www.niagaraatlarge.com for more news and commentary for and from the greater bi-national Niagara region.

“A politician thinks of the next election. A leader thinks of the next generation.” – Bernie Sanders



2 responses to “Federal and Provincial Agreement on Pension Reform May Not Be Good for Business – Greater Niagara Chamber

  1. The Niagara Chamber of Commerce is forever crying doom and gloom and it irritates me to think that most administrations in Niagara have built their own “EMPIRES” as the sunshine list illustrates. If a person feels it is in his best interest to Incorporate, run a proprietorship or engage in a partnership and they succeed to the point where they “NEED” to hire staff…Why is it Chamber “EMPIRES” are forever forecasting Doom and Gloom and the employees are threatened with job loss if the minimum wage is increased to correspond with the rising cost of living? Water for instance was once a “RIGHT” but it is now a commodity that is a “CASH COW” for municipalities…Prices going up and up with no end in sight
    (The ads put forth by a Water Meter Manufacturer used to state “Water meter can be a CASH COW for all Municipalities who Installed Meters”.
    The Cost of living keeps rising yet these Chambers only concern is Profit and Loss and to hell with the employees.


  2. After years of tax reductions and low interest rates the Chamber of Commerce is worried about the enhanced CPP causing strain on it members? What have they been doing with the savings they can’t afford to invest more in their workers? The article say the Chamber has 1600 members “representing” 50,000 employees. How about unionizing those employees, so they have real representation?

    A business owner, back in the double digit interest days, once said to me, “I don’t care what my costs are going to be but they need to be predictable into the future so I can budget for them”.

    Based on that statement I can see a benefit to small business, and workers, for government to be responsible for all employee benefits, be they pensions, sick time, vacation, unemployment, disability, etc. Sure payroll taxes would go through the roof but a whole lot of business administration expense would go with it, not having to juggle insurance companies meager benefit packages at high cost. HR department costs would be much reduced.

    Small business would also find themselves more competitive with large corporations and government for training, and retaining, workers. I can’t tell you how many small business friends have confided, all they do is train people for better jobs with other employers.

    And when a small business work force eventually has to be cut back, wouldn’t it be easier for a boss, with a heart, knowing his affected workers benefits will continue uninterrupted, that no pretty young daughter will have to forego orthodontial work cause dad/mom is out of work?

    At the heart of the Chamber’s argument, once the spin is removed, small business is dependent on retaining today’s present level of value produced it’s workers. An enhanced CPP would divert more of that value back to workers.


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