March 5, 2010, Ottawa - The Canadian Restaurant and Foodservices Association (CRFA) says that the federal government’s budget will significantly raise employment insurance (EI) rates and cause employers to pay a much higher price to create new jobs during the economic recovery.
Higher EI premiums will cost the restaurant and foodservice industry nearly $30 million a year starting in 2011.
In pre-budget consultations the 33,000-member CRFA opposed an increase in employment insurance premiums, calling it a tax on jobs. According to the federal budget, the EI premium rate for employers is rising by nine per cent in 2011 and will continue to increase through at least 2014.
“Restaurant operators have survived the recession without government bail-outs or subsidies, and instead of being applauded they are being punished with higher payroll taxes,” says Garth Whyte, CRFA president and CEO. “Businesses like ours, which depend on people, not machines, are at a breaking point in terms of payroll costs.”
After shedding more than 25,000 jobs and 3,000 businesses last year, the restaurant industry is poised to recover in 2010. That could mean thousands of new jobs, particularly for young people who are facing double-digit unemployment rates.
The Canadian restaurant industry employs more than one million people in a variety of occupations, and provides one in five jobs for young people.
“Our members were looking to this budget to give them confidence that they won’t be blindsided with another future tax increase,” says Whyte. “This budget did not deliver.”
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