Ontario Liberal Government Introduces Legislation to Create a Provincial Pension Plan
On December 8, 2014, the Ontario government introduced Bill 56 which if passed into law will be called the Ontario Pension Plan Act, 2014.
Under Bill 56, employees who are not part of a pension plan and their employers would each be required to contribute 1.9% of the employee’s earnings up to $ 90 000 each year to a provincial pension plan. This is in addition to the employee’s and employer’s contribution to the Canada Pension Plan.
According to the National Post, two out of every three Ontario employees are not currently enrolled in a pension plan. The National Post article includes reaction from a number of stakeholders. “Employers worry that by making it more expensive to hire, the new pension plan will negatively impact job creation and hurt Ontario’s competitiveness,” said Chamber president and CEO Allan O’Dette. “We need to ensure that any changes to the pension system are made with a full understanding of the impact they will have on Ontario’s business climate.”
Bill 56 represents another payroll tax on Ontario employers. For an employee earning $ 50 000 a year, an employer is currently required to contribute $ 1,279.15 to EI, $ 2425.50 to CPP, $ 3019.19 to the WSIB if the person works in auto assembly, and $ 975 in employer health tax if the employer’s payroll is over $ 850 000. The Ontario Pension Plan Act if passed into law will require an employer to pay an additional $ 975 in payroll taxes for this employee. For a discussion of payroll taxes in Ontario, click here.
For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been advising employers and employees on all aspects of the employment relationship. If you have any questions, you can contact him at 416 317-9894 or at [email protected]
The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.
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