The small business clients of advisors could be in for some tough times in the next couple of years, says one industry vet after the Ontario government passed legislation creating the Ontario Retirement Pension Plan (ORPP) Tuesday.
“It’s ridiculous and I feel sorry for the small business owners that are going to suffer, possibly go out of business because of this,” said Lynda Weinrib, an investment funds advisor at Worldsource Financial Management Inc. “Put it this way: if my client is put out of business, they have no money to invest, seek insurance, and live well for retirement.”
Her comments come after the provincial Liberals used its majority to pass the ORPP bill. Wynne has remained steadfast in her commitment to the ORPP due to the federal government’s unwillingness to enhance the Canada Pension Plan.
Ontario Associate Finance Minister Mitzie Hunter says about two-thirds of Ontario workers do not have a workplace pension, and virtually all of them will be forced to join the provincial plan.
“After a lifetime of working and contributing to the economy, Ontarians deserve a secure retirement,” Hunter said in a statement. “We are working to strengthen the retirement income system in Ontario and will give the people of this province a predictable, lifelong stream of retirement income, while supporting the prosperity of the province as a whole.”
Weinrib, however, believes the plan is detrimental to her clients and said the government has a proven track record of failure.
“This is dangerous, it really is. They’ve lost money on everything they’ve touched. I don’t think it’s going to change now.”
Employers and workers will have to front a 1.9 per cent contribution that will be phased in over the next two years, starting with the largest of companies in 2017 before impacting smaller businesses.
Katie Walmsley, president of the Portfolio Management Association of Canada, told WP that her organization is optimistic a PRPP plan can still be reached, highlighting infrastructure, debt and other factors, but sees wiggle room for changes to the ORPP with more than two years away from implementation.