MONTREAL, May 20 /CNW Telbec/ - Bombarded from all sides with proposals
for payroll tax increases (CSST, parental insurance, QPP, employment
insurance), Quebec employers, represented by the Conseil du patronat du Québec
(CPQ), are today calling on governments to put a cap on this portion of the
tax burden, which is already much heavier in Quebec than elsewhere in Canada.
"The time for a proper debate on this subject has come," said the CPQ's
new president, Yves-Thomas Dorval. "Governments must stop dealing with these
taxes one at a time in isolation. Each new levy may seem minor, but the
overall burden imposed by payroll taxes must be considered. Governments,
particularly the Quebec government, must make choices and set priorities
between the various plans that are funded by these taxes."
A disadvantage for Quebec businesses
Taxing salaries at higher levels than our neighbours makes Quebec
businesses less competitive. As demonstrated by a CPQ Backgrounder given today
to all members of the National Assembly, Quebec costs employers and employees
the most of any province in Canada.
The gap with Ontario is 31% on a salary of $40 000. This is also true for
other salary levels, particularly between $15 000 and $45 000. And the gap
increases for the best-paid workers, mainly due to the health services fund,
whose rates are considerably higher in Quebec.
All payroll taxes combined add 10% to the cost of salaries paid by
employers to Quebec workers. In absolute costs, businesses pay more than $15
billion each year for these taxes. To put this into perspective, this is more
than the Government of Quebec receives from all consumption taxes.
Implement the Fortin Report
The CPQ's proposal to stabilize the payroll tax level is not
revolutionary. The government's Groupe de travail sur l'investissement des
entreprises, chaired by economist Pierre Fortin, made this recommendation in
its final report published in March 2008, prior to the current recession.
"Given that we are now in the middle of a downturn, that considerable
increases to payroll taxes are being discussed this month, and that businesses
must continue paying these taxes whether they make profits or not, the
implementation of this recommendation is more urgent than ever," said Mr.
Prepared by the CPQ's research director and chief economist, Norma
Kozhaya, the background document "Payroll Taxes: The Quebec Disadvantage," is
available at www.cpq.qc.ca.
The Conseil du patronat du Québec brings together many of the province's
largest companies, as well as the vast majority of sector-based employers'
associations, making it the sole employers' confederation in Quebec.
For further information:
For further information: Patrick Leblanc, Director of Communications,
(514) 288-5161, ext. 226, Cell.: (514) 571-6400