proposed Ontario Retirement Pension Plan (ORPP) makes it mandatory for
employers and employees to each contribute 1.9% of employment income to
such a plan, in the name of enhancing retirement security for
Ontarians. In the case of self-employment, the taxpayer has to
contribute 3.8% (1.9%X2) of self-employment income.
new payroll withholding of 3.8% for ORPP would be on the top of the
existing 9.9% CPP and 4.512% EI contributions and would have the effect
of increasing the cost of doing business and reducing people’s
disposable income. As the proposed ORPP would negatively affect small
businesses and low-income families more than others, the Chinese
Business Chamber of Canada is petitioning to make the Plan optional for
self-employment income earners and small businesses with 10 employees
or under, for the following 5 reasons.
you agree with our proposal and positions, please:
the following message to ORPP@ontario.ca and
also send the email to your MPP in your riding. All MPP contact info
can be found on the webpage: http://www.ontla.on.ca/web/members/members_current.do?locale=en.
3) at the end of your
message, leave your name and contact info.
4) after taking the above
steps, please send an email to firstname.lastname@example.org confirm that
you have joined us in the action, so that we can inform your for
further possible action.
for Small Business to Opt out of ORPP
I believe that the
proposed ORPP would negatively affect small businesses and low-income
families and I support
the Chinese Business Chamber of Canada's proposal to make the Ontario
Retirement Pension Plan optional for self-employment income earners and
small businesses with 10 employees or under, for the following 5
hurting low-income families
starting point of the ORPP is the concern that low-income earners may
spend all their money in the years when can work and would have no
savings to support them in their retirement. So the Plan intends to
force them to save now in order to reduce the financial burden of the
society in the future. This is fair to those who are earning enough for
them to save but choose not to save.
to those whose earnings are barely enough to support their basic
living, it is unfair to make their life more difficult now by reducing
their net pays, in order to save taxpayer’s money in the future.
If these people indeed have no money for retirement and need financial
assistance in the future, to provide such assistance should be a
responsibility of the society in the first place. The redistribution of
social wealth is one of the functions of taxation.
restricting people’s freedom in managing their own financial
of the small business owners and their employees have very limited
financial resources. The imposed ORPP contribution would further
restrict their freedom in managing their own financial affairs,
including the freedom in planning their retirement. Saving money now is
only one of many ways to plan for future retirement; for many families
the better ways are to spend money on paying off their mortgage,
raising kids, and investing in their businesses and so on.
restricting freedom of enterprise
immigrants start their own businesses because they can not find jobs
after coming to Canada and have very limited financial resources. To
increase employment cost for these small business owners would have the
effect of reducing funds available to invest in their business and
limiting their potential growth.
is our belief that the government should provide support for these
small businesses which create a few jobs, instead of transferring
financial burden onto them.
reducing tax revenue
The proposed ORPP requires self-employed entrepreneurs
to contribute 3.8% of their reported net business income, on the top of
9.9% CPP. The increased cost of reporting self-employment income would
drive more small businesses under ground. Take a taxpayer with $50k net
self-employment income as an example, assuming that in order to save
9.9% of CPP and 3.8% ORPP contributions, the self-employed taxpayer
underreports $10k gross business income, and the result would be that
the government would lose tax revenues in HST of $1,300 and income
taxes of $2,500 (assuming combined Federal and provincial rate of 25%).
Fifth, punishing hard-working families
There are many low-income earners among the
self-employed and wage workers. Assuming two low-income families in
comparison, one family relies on earned income and has to contribute
CPP and ORPP while the other family live entirely on social benefits
and/or government assistance but need not contribute to any plans. That
would send a wrong message to the public.