Meridian study reveals 77% see it as their greatest challenge.
TORONTO — Ontario small business owners are feeling vulnerable to the introduction of the Ontario Retirement Pension Plan (ORPP), according to Meridian.
The Ontario credit union’s 2014 Small Business Banking in Ontario Study revealed that more than three quarters (77%) of small business owners believe that managing the introduction of the pension plan could be their biggest business challenge. Forty-one per cent see it as a barrier to their business growth in 2015, second only to economic uncertainty (60%).
The mandatory provincial pension plan is intended to complement the Canadian Pension Plan (CPP) and help Ontarians save for retirement. Employers would match an employee’s contributions of 1.9% per year in earnings up to a $90,000 income maximum.
Employees already participating in a similar workplace pension plan and those working in federally regulated industries are exempt from contributing to the ORPP.
Small business owners fear the implications. Although 61% agree that they would be in favour of the ORPP if they were employees, 91% express concern about the ORPP chipping into their profits. In fact, half of the owners surveyed do not feel their businesses can remain at their current capacity while contributing to the ORPP.
One-half of the respondents feel responsibility for helping their employees build their nest eggs, yet 61% worry implementation of the ORPP may negatively impact their own retirement plans.
Additional key findings:
• Ontario small business owners who expect a decline in business in 2015 are significantly more likely than those forecasting growth to have highlighted the ORPP as a barrier to staying on track.
• 43% intend to hire more employees, compared to only 25% who planned to hire this year.
• 75% of small business owners expect their business to grow in 2015.
The survey was conducted with 300 small business owners in Ontario in August 2014. A probability sample of the same size would yield a margin of error +/- 5.7%, 19 times out of 20.