Federal budget serves up hidden tax on jobs

OTTAWA, March 4 /CNW/ - Hidden in today's budget is the government's plan to significantly raise employment insurance rates - which means employers will be paying a much higher price to create new jobs during the economic recovery.

Higher EI premiums will cost the restaurant and foodservice industry nearly $30 million a year starting in 2011.

In pre-budget consultations the 33,000-member Canadian Restaurant and Foodservices Association (CRFA) opposed an increase in employment insurance premiums, calling it a tax on jobs. According to the federal budget, the EI premium rate for employers is rising by nine per cent in 2011 and will continue to increase through at least 2014.

"Restaurant operators have survived the recession without government bail-outs or subsidies, and instead of being applauded they are being punished with higher payroll taxes," says Garth Whyte, CRFA President and CEO. "Businesses like ours -- which depend on people, not machines -- are at a breaking point in terms of payroll costs."

After shedding more than 25,000 jobs and 3,000 businesses last year, the restaurant industry is poised to recover in 2010. That could mean thousands of new jobs - particularly for young people who are facing double-digit unemployment rates.

The Canadian restaurant industry employs more than one million people in a variety of occupations, and provides one in five jobs for young people.

"Our members were looking to this budget to give them confidence that they won't be blindsided with another future tax increase," says Whyte. "This budget did not deliver."

CRFA is one of Canada's largest business associations, with 33,000 members representing restaurants, bars, caterers, institutions and other foodservice providers. Canada's foodservice industry employs more than one million people in communities across the country.

For further information: Prasanthi Vasanthakumar, CRFA Communications, 1-800-387-5649, ext. 4254 or [email protected]