Provinces turn deaf ear to taxpayers on retirement savings
TORONTO, March 5, 2014 /CNW/ - With Prince Edward Island and Manitoba now actively participating in Ontario's plans for a mandatory provincial pension plan, small business owners are expressing alarm at the idea that some provinces would look to increase payroll taxes – taxes on job creation.
"After breathing a sigh of relief with the end of talks to expand the Canada Pension Plan, small business owners in Ontario, Prince Edward Island and Manitoba are facing the even worse idea of a provincial pension plan," said CFIB president Dan Kelly. "This would put entrepreneurs in provinces that sign on to the plan at a competitive disadvantage to those in provinces that don't hit their citizens and businesses with new payroll taxes."
Late last year, 79 per cent of small business owners in Ontario opposed a provincial pension plan with 65 per cent suggesting it would force them to freeze or cut salaries. "We have no reason to believe that small firms in Manitoba or PEI would view the issue any differently," Kelly said.
"In practical terms, this is just another tax on employers and workers. More taxes will simply not help make Ontario competitive," said Plamen Petkov, CFIB's vice president for Ontario. "Small firms are already facing significant minimum wage hikes, new infrastructure taxes, and now mandatory provincial pension plan contributions? Something has got to give."
In addition to hard costs to employers and workers, increases to any mandatory pension plan would have larger economic impacts. When a proposed CPP increase was studied last year, CFIB found that the most ambitious proposals would have led to 1.2 million lost person years of employment and a permanent drop in real wage levels of between 1 and 2.5 per cent.
CFIB is Canada's largest association of small and medium-sized businesses with 109,000 members across every sector and region.
SOURCE: Canadian Federation of Independent Business
For further information: To arrange an interview with Dan Kelly or Plamen Petkov, please contact Gisele Lumsden at 416-222-8022 or [email protected]