New payroll taxes threaten foodservice jobs

(Jun. 30/10) The government’s new plan to modify the Canada Pension Plan (CPP) could hit foodservice operators with higher payroll taxes that hinder their ability to create and maintain jobs for Canadians.

Finance Minister Jim Flaherty recently indicated the federal and provincial governments plan to work together on a “phased-in and fully funded” enhancement to defined benefits under the CPP that would increase coverage and payouts. 

Due to its labour-intensive nature, the foodservice industry is disproportionately affected by increases in labour costs.  On average in Canada, 35 cents of every dollar spent in a restaurant covers labour costs.  Government has already indicated that employment insurance (EI) premiums paid by employers could increase by up to 21 cents per $100 of insurable earnings, the maximum allowable by law.  Additionally, so far in 2010, six provinces have already announced minimum wage hikes.  

Piling new payroll taxes on top of increases to minimum wage and EI premiums further impedes the industry’s ability to provide jobs, running counter to the goal of helping Canadians boost retirement savings.

What CRFA is doing
CRFA urges federal and provincial governments to not increase payroll taxes and endanger foodservice jobs in their quest to resolve the shortfall in Canadians’ retirement income.  Instead, CRFA is lobbying officials to consider policy options that will not further raise payroll costs.