"The time for a proper debate on this subject has come," said the CPQ's new president, Yves-Thomas Dorval. "Governments must stop dealing with these taxes one at a time in isolation. Each new levy may seem minor, but the overall burden imposed by payroll taxes must be considered. Governments, particularly the Quebec government, must make choices and set priorities between the various plans that are funded by these taxes."

A disadvantage for Quebec businesses

Taxing salaries at higher levels than our neighbours makes Quebec businesses less competitive. As demonstrated by a CPQ Backgrounder given today to all members of the National Assembly, Quebec costs employers and employees the most of any province in Canada.

The gap with Ontario is 31% on a salary of $40 000. This is also true for other salary levels, particularly between $15 000 and $45 000. And the gap increases for the best-paid workers, mainly due to the health services fund, whose rates are considerably higher in Quebec.

All payroll taxes combined add 10% to the cost of salaries paid by employers to Quebec workers. In absolute costs, businesses pay more than $15 billion each year for these taxes. To put this into perspective, this is more than the Government of Quebec receives from all consumption taxes.

Implement the Fortin Report

The CPQ's proposal to stabilize the payroll tax level is not revolutionary. The government's Groupe de travail sur l'investissement des entreprises, chaired by economist Pierre Fortin, made this recommendation in its final report published in March 2008, prior to the current recession.

"Given that we are now in the middle of a downturn, that considerable increases to payroll taxes are being discussed this month, and that businesses must continue paying these taxes whether they make profits or not, the implementation of this recommendation is more urgent than ever," said Mr. Dorval.