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Fri, Jun 23, 2017
 
Petition for Small Business to Opt out of ORPP

The 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.

This 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.

If you agree with our proposal and positions, please:

1) email the following message to ORPP@ontario.ca and

2) 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 tocbcc@gmail.comto confirm that you have joined us in the action, so that we can inform your for further possible action. 

Thanks

Petition 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 reasons.

First, hurting low-income families

The 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.

However, 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. 

Second, restricting people’s freedom in managing their own financial affairs

Many 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.

Third, restricting freedom of enterprise

Many 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.

It 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.

Fourth, 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.

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