The Canadian Federation of Independent Businesses (CFIB) is warning that scheduled 2023 payroll tax hikes will mean that every Canadian will see $305 less in take-home pay on the first day of the year.
Beginning on Jan. 1 Canada Pension Plan premiums will go up to 7.3%, costing up to $255 more in contributions per employee. On the same day, Employment Insurance premiums will increase by 5.2%.
“The maximum additional amount that an employee will pay in EI and CPP contributions is $304.71. It may not seem like a lot, but $300 can cost one family a trip to the grocery store or pay for their transportation or utility bills. Payroll tax increases will hit Canadians at a time when most are already seeing their cost of living quickly increase,” said CFIB president Dan Kelly.
“The hikes will also affect small businesses. With rising input costs, staggering labour shortages and a potential recession, the economy is already in a bad shape. At minimum, the government should be pressing pause until inflation is under control.”
Individual employers have the responsibility to raise wages to offset the increases but data indicates many are unable to according to the CFIB.
“Some businesses are saying what they face these days is as bad, if not worse than during the pandemic. So now is not the time to raise taxes and drive more businesses into despair. Give them a break,” said CFIB senior vice-president of national affairs Corinne Pohlmann.
“During the pandemic, the government froze EI premiums in 2021 and 2022. The same approach should be taken next year as well.”
A majority of small-businesses across Canada have had to take on pandemic debt averaging over $114,000.
According to a Department of Industry report from earlier this year, small businesses lost 740,800 jobs or 9% of the entire industry due to government lockdowns and pandemic measures.
Conservative leader Pierre Poilievre has blasted the Liberal government for raising taxes on Canadians while many face uncertain economic prospects.
“The NDP-Liberal (coalition) voted to triple the carbon tax on home heating. They haven’t realized home heating prices are already skyrocketing this winter and their only goal is to make it even more expensive,” tweeted Poilievre last week.