Ontario Retirement Pension Plan: Retailers Say Buyer Beware
TORONTO, July 14, 2014 /CNW/ - Members of Retail Council of Canada (RCC) are concerned about the implications of the Ontario Retirement Pension Plan (ORPP), the centrepiece of today's Ontario budget.
"Retailers understand the need for all Ontarians to build an adequate nest egg for retirement," says Diane J. Brisebois, President and CEO of Retail Council of Canada. "The level of retirees' incomes affects the overall economy and of course determines people's abilities to buy goods from our members. The challenge will be to balance the importance of long-term pension incomes against the nearer-term impact on growth, jobs and investment."
"There is a limit to the payroll contributions that retail businesses in this province can be expected to pay without there being a significant economic impact," continues Brisebois. "We have a substantial employer health tax, the second highest WSIB rates in Canada and now, we are looking at a new provincial retirement pension plan. The government will have to look at the cumulative impact of these payroll costs, to ensure they do not diminish our capacity to hire more Ontarians and to make key investments."
In a recent telephone survey about the introduction of the ORPP, retailers expressed concerns about:
- The significant cost that this program will impose on merchants. This is especially troubling for small to mid-sized retailers.
- A $3,500 annual salary contribution threshold will limit the hiring of seasonal, part-time and first-time employees.
- With retail sales nearly flat in Ontario for many categories, retailers will have no way of recouping these costs except by increasing prices or by decreasing staff or new hires.
- The increased pressure from all quarters: the rising Canadian dollar, cross-border shopping and limited economic growth.
RCC and its retail members understand that the government has received a majority mandate on a platform which included implementation of the ORPP. That said, the retail industry maintains that the implementation details of the new pension plan will be critical to the well-being of the sector.
On the second initiative in today's budget, RCC is pleased that the Government of Ontario has listened to retailers' concerns on new revenue tools to fund infrastructure.
"RCC had been opposed to proposals to introduce retail-unfriendly revenue tools, such as parking stall levies, to pay for investments in transport and transit infrastructure," says Brisebois. "We applaud the government's balanced approach to reinvesting in the infrastructure of this province to support the movement of goods and people that is vital to a healthy economy."
Retail Council of Canada (www.retailcouncil.org) is the Voice of Retail. Founded in 1963, RCC is a not-for-profit association which represents more than 45,000 stores of all retail formats, including department, grocery, independent merchants, regional and national specialty chains, and online merchants.
SOURCE Retail Council of CanadaFor further information:
Retail Council of Canada