170,000 reasons to stop the paycheque tax grab

Guest Commentary
By Brian Bonney

On January 1, 2011, you and I are going to take a pay cut thanks to rising Employment Insurance (EI) taxes on our paycheques. As payroll taxes go up, our take-home pay will go down and 170,000 of us could lose our jobs. Here’s why. Several years ago, the federal government appointed an independent board to set EI premiums. The board is mandated to ensure that the EI account stays balanced, that employment insurance is there when you need it and that premiums are only used for EI purposes. Those are laudable goals, except the board was only given a $2 billion cushion to get started. Then the recession hit, and to its credit, the federal government stepped in and froze EI premiums in 2009 and 2010 to help provide stability. It was a positive move at the time as it’s never wise to make payroll more expensive, particularly during a recession. So what has happened to the EI money we have been paying all these years? Good question. The surplus, the money you have been paying into the EI fund to be there for you on a rainy day, grew to $57 billion. That money was siphoned off into general government revenue by both the federal Liberals and the federal Conservatives. Now that the government used our money, they are going to make us build the EI fund up again by increasing our payroll taxes! Things are going to get really ugly. In fact, the recommendation is that EI premiums increase to the maximum allowable level in 2011. If increases continue for the next four years, as expected, we’ll face a whopping 35 per cent increase in EI taxes. And if you think workers are concerned, so are employers. For every $1 workers pay in EI premiums, employers pay $1.40 on their behalf. Payroll taxes are a direct cost on employment for business owners, plain and simple. When payroll taxes go up, so will unemployment. In fact, independent studies show that if the federal government increases the EI tax on Canadian businesses by 35 per cent, we could lose as many as 170,000 jobs in Canada. That’s a 170,000 reasons to get involved in CFIB’s campaign to stop the tax grab. Contact your MP and say you don’t want a pay cut next year. Visit “Stop the Tax Grab” on Facebook. Or visit www.cfib.ca for more ideas. Together, we can save these jobs! Brian Bonney is the BC Director of Provincial Affairs with the Canadian Federation of Independent Business. He can be reached at [email protected]