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Canadian Conservatives Pledge Payroll Tax Cut

by Mike Godfrey, Tax-News.com, Washington

11 September 2015


Canadian Prime Minister Stephen Harper has announced that a re-elected Conservative Government would cut payroll taxes by over 20 percent in 2017.

Harper said that his Government would reduce the Employment Insurance (EI) rate from CAD1.88 per CAD100 (USD75) of insurable earnings to an estimated CAD1.49 per CAD100 in 2017.

"Approximately 16 million working Canadians will see the benefits of this rate reduction on each and every pay [check]. Put simply, our plan will cut taxes on working Canadians and keep them low," he explained.

Harper also pledged that he would not raise Canada Pension Plan (CPP) payroll taxes. He said any such increases would "hurt middle-class Canadian families, leaving them with less money every month."

"By dramatically reducing payroll taxes, Canadian workers will see their take-home pay increase and businesses – especially small businesses – will be able to create new jobs and invest in their current employees. Our Conservative Government has a proven record of reducing taxes on hardworking Canadians and job-creating businesses, and we have a plan to go further," Harper added.

The Prime Minister accused the opposition NDP and Liberal parties of planning to hike payroll taxes. He warned that their proposals would put Canadian jobs at risk and create economic chaos.

Liberal Leader Justin Trudeau has said that his party would establish a more reliable EI system "that is there for Canadians, and helps boost our country's economic growth, now and in the future." A Liberal Government would reduce the waiting period for EI benefits, reform the conditions for re-entering the workforce, introduce a more flexible parental leave and care benefits package, and work with the provinces and territories to assess how successfully EI is delivering its mandate to provide income security to workers.

TAGS: tax | small business | business | employees | payroll | tax rates | social security | Canada | tax reform | Employment

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