EI Increase Announced

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OTTAWA — Federal Finance Minister Jim Flaherty announced this week that restaurant operators will have to pay a $13-million payroll tax increase, half of the originally announced hike.

“To further help Canadian workers and employers overcome the challenges posed by a still-fragile global economy and to support jobs and growth, we are announcing today that we are reducing the maximum potential increase in next year’s EI premiums from 10 cents to five cents per $100 of insurable earnings, the same rate of increase as in 2011,” said Flaherty.

The news doesn’t bode well for the foodservice industry. “We appreciate that the EI increase could have been double, but any increase at all is bad news for employment in this economy,” said Garth Whyte, president and CEO of the Canadian Restaurant and Foodservices Association (CRFA). “This is especially true for us as a people industry, where opportunities for job creation are the greatest.”

CRFA is advocating a reform to the EI system to ensure low, long-term, stable premium rates. The organization is recommending a year’s basic exemption in the EI system to make it a more progressive tax for entry-level workers and less punitive to labour-intensive businesses.

Canada’s $63-billion restaurant industry employs more than one-million people.

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