Food services association calling for EI freeze

EI rate increase will mean $13 million payroll tax increase for restaurant and food services industry
||Last Updated: 11/09/2011

One day after Finance Minister Jim Flaherty announced the planned 2012 employment insurance hike would be halved, a business association said the cut is not enough.

The increase will hit restaurant employers with a $13-million payroll tax increase — “a tough pill to swallow in these hard economic times,” said the Canada Restaurant and Foodservices Association (CRFA).

"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 association. "This is especially true for us as a people industry, where opportunities for job creation are the greatest."

"In a nutshell, payroll taxes are an unfair and unnecessarily harsh way for government to raise revenue," said Whyte. "Yes, the increase wasn't as bad as expected, but it will still hurt. We may have dodged a bullet, but we're not out of the woods — not by a long, $13-million stretch."

CRFA wants federal government on behalf of its members to streamline and reform the EI system to ensure low, long-term, stable premium rates, according to the association.

CRFA 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, said the association.

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