A Tax on Jobs is an Attack on Jobs

VANCOUVER, August 27, 2019 – In advance of the Labour Day long weekend, the Canadian Federation of Independent Business (CFIB) today released a new national report that analyzes the damaging impact payroll taxes have on small businesses and local jobs.

The report’s findings show British Columbia has the second highest cumulative payroll tax burden in the country, largely due to the introduction of the Employer Health Tax (EHT) on January 1, 2019. BC is now one of five provinces to have a payroll tax, with only Quebec having a higher total payroll tax burden.

“Payroll taxes are the most difficult kind of taxes for small businesses to absorb, and can seriously impair their ability to create jobs and boost wages,” says Richard Truscott, Vice-President of B.C. and Alberta. “There are far less harmful ways for the government to generate revenue. That’s why, over the long-term, the BC government needs to develop a plan to phase-out the EHT,” adds Truscott.

The report, Taxing Payroll: A Barrier to Business Growth and Competitiveness, finds payroll taxes place a disproportionate burden of taxation on smaller businesses. Survey data in the report also reveals 77 per cent of entrepreneurs say payroll taxes are the most harmful tax for their business.

Along with a list of recommendations made in the new report, CFIB is calling on the BC government to specifically review the Employer Health Tax and:

1. Increase the payroll exemption to at least $1.25 million;
2. Make the tax fully graduated (i.e. keep the tax calculation the same at all payroll thresholds: 1.95% X [payroll - $500,000], and apply the small business exemption to all payroll thresholds; and
3. Exempt youth from the payroll calculation for the tax.

“The employer health tax is an attack on jobs and job creation. As a province we need to be growing jobs, not stifling them,” says Truscott. “The best way to do that is to first restructure the EHT, and then create a long term solution to eliminate it entirely,” adds Truscott.

For media enquiries or interviews, please contact after 8:30AM (Pacific Time):
Richard Truscott, Vice-President, B.C. and Alberta
604-684-5325
ms.bc@cfib.ca