ORHMA speaks out on Retirement Pension Plan

Foodservice margins have declined from 9.6 per cent in 1990 to to 4.2 per cent in 2013 and 90 per cent of ORHMA members surveyed are concerned about the impact of Ontario Retirement Pension Plan changes. 

Tony Elenis and Leslie Smejkal of the ORHMA have written The Hon. Mitzie Hunter, Associate Minister of Finance, expressing concerns about the impact of an ORPP on the province's hospitality industry.

In the letter, they note that the Canadian foodservice industry has been pressured with skyrocketing food costs, escalating utility bills and, with the proposed ORPP changes, a 1.9 per cent increase in labour costs.

The following is the text of the letter:

Dear The Honourable Mitzie Hunter,

Please know we understand that your government is concerned about the retirement needs of a 21^st century workforce. We also appreciate that your preferred option is still CPP enhancement, something your government has been advocating since 2010.

We thank you for the opportunity to have participated and contributed to your consultations on the Ontario Retirement Pension Plan design. Please find attached the Ontario Restaurant Hotel and Motel Association’s response to your Ontario Retirement Pension Plan: Key Design Questions.

ORHMA has heard from its membership and we are concerned about the impact of the implementation of an Ontario Retirement Pension Plan (ORPP) will have on Ontario’s hospitality industry. It is not about revenue growth in the foodservice industry anymore, it’s about the pressures on the expense lines.

Recent years brought significant increases to specific cost categories that just happened to be the highest foodservice expenditures. Food Commodities have skyrocketed and with this category making up an average of 35 per cent of total expenses it’s been a challenge.

The cost from utilities continues to escalate hammering foodservice operators in an industry that ranks first in the highest energy intense category. Conservation programs do help but incentives applied to demand peak times are useless as the industry operates at full throttle during the Breakfast and Dinner periods.

Consumer confidence and disposable income stimulate the economy more than many initiatives including governments issuing bonds. This simple economic case can be applied to the foodservice industry. Support for profit growth in the industry will result in investment, capital improvements and job growth benefiting the overall economy including government revenues.

ORHMA remains concerned about the unintentional consequences a 1.9% increase to an industry operating at 33 per cent labour costs is a significant new cost to absorb. There will be further restraining of hiring younger workers and while the government aims for the well being of Ontarians there will be unintentional consequences to employee benefits. Our members have told us that this will lead to trimming health benefit plans such as prescription drug and dental plans as these are typically managed and accounted less than one profit and lost statement department line.

Please do not get us wrong- a pension plan is good for society and it brings benefits later on. Our concern is that the hospitality industry has not recovered and we cannot afford your ORPP. A survey taken among our membership overwhelmingly in the 90 per cent range illustrates the huge concerns and fears. Many are living pay cheque to pay cheque to make ends meet. We call for improved dialogue with the Federal government to achieve a win -win solution.

Thank you for your time and consideration. ORHMA will continue to participate in dialogue on this mater with you and your team at the Ministry of Finance.

Best regards,

Tony Elenis, president and CEO, ORHMA 

Leslie Smejkal, vice-president, government relations, ORHMA