The Canadian Federation of Independent Businesses (CFIB) says 2023 payroll tax hikes mean every Canadian will see $305 less in pay next year.
According to True North, Canada Pension Plan premiums will go up to 7.3% beginning Jan. 1. That will cost each employee $255 more. At the same time, Employment Insurance premiums will also increase by 5.2%.
“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.
Kelley said the hikes would impact 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 are responsible for raising wages to offset the increases, but data indicates many are unable to, according to the CFIB. The business group also reports that 58% of businesses still carry pandemic-related debt averaging over $114,000.
“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 Corinne Pohlmann, CFIB senior vice president of National Affairs.
“During the pandemic, the government froze EI premiums in 2021 and 2022. The same approach should be taken next year as well.”
CFIB has sent a letter to Deputy Prime Minister Freeland calling on the federal government to do no harm and avoid burdening small businesses even further.