Canadian Pizza Magazine

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Industry’s payroll taxes to increase in 2011


October 1, 2010
By Canadian Pizza

pzcanadianmoneythumbnailOctober 1, 2010, Toronto, Ont. – Although restaurant operators will face an estimated $100-million dollar increase in payroll taxes next year, the news isn’t as bad as some in the industry were bracing for.

Yesterday federal Finance Minister Jim Flaherty announced that the 2011 increase in employment insurance would be limited to five cents per $100 of insurable earnings, and to 10 cents for subsequent years. This is lower than the 15 cent increase Flaherty was expected to announce, and which some experts warned could cost the Canadian economy well over a billion dollars.

“The Minister has heard us and we’re pleased he is taking steps to bring the runway EI premium train under control,” says Garth Whyte, president and CEO of the Canadian Restaurant and Foodservices Association.

“In an industry like ours that invests in people, not machinery, payroll taxes are a huge issue. Today we’ve been told the EI hurricane threat has been downgraded from level 5 to level 2.”

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Over the past several months, the CRFA has lobbied the federal government to freeze EI rates rather than discourage hiring by raising payroll taxes. The CRFA has also argued that Ottawa must fund any EI shortfalls out of general revenues. The organization fears that if the government refuses, employers and employees will be paying a huge price later on when EI rates are increased to make up a shortfall in the EI fund.