“Unanswered questions” over pension plan

By Graeme McNaughton/The Oshawa Express

The head of the city’s chamber of commerce says businesses throughout Oshawa are worried about the possibility of a mandatory provincial pension plan.

It also doesn’t help that there are still many unknowns about it.

“It’s going to impact small businesses. Very much so,” Bob Malcolmson, the CEO and general manager of the Greater Oshawa Chamber of Commerce, tells The Oshawa Express.

“Small businesses are going to have to take a look at what their costs are. There’s got to be a better way, and the government certainly has to take a look at it.”

Originally proposed during the 2014 provincial election, the Ontario Retirement Pension Plan is set to come into effect in 2017 for companies with more than 500 employees, with full implementation by 2019. The program would see employees kick in 1.9 per cent of there annual income up to $90,000, with the employer matching that amount.

Malcolmson says the province made a step in the right direction when it recently announced it would expand the comparability rules for the proposed pension, but there are still a lot of unknowns that are leaving business owners concerned.

“They expanded the definition of comparability under the province’s plan for some defined benefit plans, but they haven’t explained totally which ones are in and which ones are out. They haven’t said when a person who’s turning 65 can expect to start collecting the money because it’s a new plan, so it’ll take time to build up dollars and cents,” he says.

“So a person starting now that’s going to be paying into it for the next five years – when they turn 65, are they going to get anything out of the program? That’s something that wasn’t explained.”

Malcolmson says that the province needs to talk more with Ontario’s business community, as they will be the ones shouldering a heavy weight with this new plan.

“(The province is) dialoguing with business, and they need to do a lot more. The best way going forward is to have it combined with the Canadian Pension Plan, and have it be voluntary. Don’t have the employer cover 50 per cent of the costs,” Malcolmson says. “Let’s use, for example, a tradesperson like a plumber or an electrician. They got employees, and if they got to put this plan in place and all of a sudden their costs are going to go up, how are they going to recoup their costs? Any business will have to turn around a say, ‘OK, I’ve got to increase my costs to my customers.’ You take a look at that, and are you pricing small businesses to the point where they say they can’t do this anymore?”

Malcolmson says that while there are many people that don’t have enough in the bank for their post-employment years, that doesn’t mean businesses should be bearing the brunt.

“I understand there certainly an awful lot of people that aren’t saving up for their retirement plan. But they should be encouraging people to do that, not on the backs of small business and saying, ‘OK, you’ve got to be the administrator; you’ve got to be the collector,’” he says. “The business only has so much money to put out and then they have to increase their costs. If they increase their costs, it could put small businesses out of business.”

The chamber of commerce chief says that while the idea may look good on paper, it – combined with other provincial issues – will only hurt small business owners.

“There’s an awful lot of unanswered questions, and when you tag that on to the rising cost of electricity, it’s just going to impact small business,” he says. “The question is whether small businesses can afford it, and I think you’ll see a resounding, ‘No, we can’t.’

Across the aisle at Queen’s Park

Jennifer French, the member of provincial parliament for Oshawa, says that while there will be short-term pains with the pension plan, there will be long-term gains.

“I certainly think that there are many moving parts to this conversation, but when we’re looking at our society in the long term, people, including businesses, want that long-term predictability. Everyone wants that predictable income stream, whether we’re talking about a retiree or talking about a worker in their prime working years or a community business that wants people walking through the door and spending money,” she says. “Will there be a challenge when it comes to implementation? I think that that’s fair to share, that there will be adjustments for everyone. But the long-term benefit…far outweighs the short-term cost.”

The NDP’s pensions critic, however, says that there are still plenty of problems with the province’s plan, including some raised by Malcolmson such as the many questions that remain unanswered.

French also voices concern that too many people are being left out of the plan.

“We do, consistently, want the best for the most people,” French says. “We need to include more people, whether that’s a universal plan…we know that any of our social programs, any of our wide-reaching programs, whether we’re talking about healthcare or pension, that they’re the most successful for the most people when they’re universal.”

French adds that this pension program is only looking at half of the problem facing many of the province’s residents.

“When we’re talking a pension and retirement security, that’s an important part of the conversation, but we need to further the conversation to include those who are in their working years. People need to have predictability in their employment now,” French says. “We should be focusing on addressing precarious work, our high unemployment, having a manufacturing strategy. Here in Oshawa, certainly an automotive strategy. We want people to have predictable and stable employment so then they can also be able to plan for and enjoy that stability in their retirement. You can’t have one without the other. All of these pieces fit together.”

Whitby-Oshawa MPP Christine Elliott was unavailable for comment.