News

Liberals' provincial pension plan a job killer: Survey

By Terry Davidson, Toronto Sun

Premier Kathleen Wynne (TORONTO SUN FILES)

Premier Kathleen Wynne (TORONTO SUN FILES)

TORONTO - 

Steven Mastoras has 33 loyal and hardworking people in his employ -- and he is cautiously hoping to keep it that way after the June 12 provincial election.

The Toronto restaurant owner is one of a few thousand small-business owners in the province who recently completed a survey by the Ontario branch of the Canadian Federation of Independent Business (CFIB).

The results, released Monday, show 86% don't support the cont roversial 2014 budget proposal by Liberal Leader Kat hleen Wynne to create a provincial pension plan. And almost as many respondents say they are "unlikely" to back a candidate who supports the plan.

A little over half surveyed said the additional payments that the Ontario Retirement Pension Plan (ORPP) would require them to make could very well mean reducing their employee number to combat the extra cost. Almost 70% said it would result in them having to impose wage freezes and salary cuts.

The Liberals' proposed ORPP would be used as a supplement to the Canada Pension Plan (CPP). And, as is the case with the CPP, the ORPP would see employees kick in a portion of their income to the plan, with employers having to match that.

While respondents also cited red tape, rising taxes, increasing energy costs and provincial debt as big headaches, the report gave particular attention to the ORPP-- something both the CFIB and Ontario PC Leader Tim Hudak refer to as a "payroll tax" that would be detrimental for business owners like Mastoras.

In terms of numbers, Mastoras estimates the ORPP would mean a "hit" of $10,000 annually. The increase, combined with the June 1 minimum wage hike to $11 and various increases in payroll taxes and regulations, could cause him to put the kibosh on new hiring, reduce employees' wages, and even cut members of his "great team."

"Labour costs are really (a) small business' only controllable expense," said Mastoras, whose family has owned East York's Whistler's restaurant and banquet hall for 34 years. "The only method where a small business owner can try to save some expense is by taking measures that reduce the number of employees or trim hours that an employee would work. Or a freeze, and perhaps a reduction in wages where possible," he said.

While CFIB Ontario vice-president Plamen Petkov insisted the survey was meant to be a non-partisan measuring of where his members stand, he acknowledged the sweeping dislike of the Liberals' ORPP proposal.

"The good news is there are still two weeks to go (to the election). Hopefully, party members will begin to focus on small business," Petkov said.

The survey also found that 94% said they supported any government policy to reduce small-business "red tape," something Hudak recently vowed to do if elected Ontario's next premier.

CFIB Ontario represents 42,000 small-and medium-sized businesses in the province. The survey is considered to be accurate within +/-1.7 percentage points, 19 times out of 20.

- - -

BY THE NUMBERS

Do you support the implementation of the Ontario Registered Pension Plan?

Yes 8%

Don't know 6%

No 86%

The majority of small business owners (86%) do not support the implementation of the Ontario Registered Pension Plan proposed in the 2014 budget. Respondents indicate that this proposal will significantly increase their payroll tax burden. For instance, if an employee earns $45,000, they and their employer will have to each pay $788 per year over and above their existing contributions to the Canada Pension Plan (CPP).

- - -

How likely are you to vote for a candidate who would support the proposed Ontario Retirement Pension Plan?

Will not affect my vote 9%

Don't know 5%

Likely 6%

Unlikely 80%

As a result of the negative impact the implementation of such a plan would have, 80% of small business owners are unlikely to vote for a candidate in the upcoming provincial election who would support the proposed Ontario Retirement Pension Plan.

- - -

If implemented, what impact would paying additional Ontario Retirement Pension Plan premiums have on your business?

Freeze/ cut salaries 69%

Reduce the number of employees 53%

Reduce investments in my business 52%

Reduce the ability to offer alternative retirement plans 31%

Close down the business 13%

No impact 8%

The implementation of the Ontario Retirement Pension Plan or a similar mandatory pension plan would have wide-ranging economic impacts including 69%of small businesses having to freeze or cut salaries, 53% reducing the number of employees, and even 13% closing down to cope with the added costs.

- - -

How supportive are you of the following policy commitments that political party leaders might make during the election campaign?

Supportive Not supportive Don't know

Reduce red tape 94% 4 1%

Reduce energy costs 93% 7 0%

Balance the budget

by 2017/18 1% 8% 1% b

Pay down

overnment debt

91% 8% 1%

Reduce

pprenticeship ratios

45% 17% 38%

Increase the

inimum wage

35% 64% 1%

Introduce new/higher

taxes to fund

nfrastructure

16% 83% 1%

 

Poll

Would you be willing to pay into an Ontario pension plan similar to CPP?


Reader's comments »

By adding a comment on the site, you accept our terms and conditions