CANADA | Restaurant's Canada has urged a reduction in EI Premiums to immediately lift the strain on small businesses.
Restaurants Canada, together with other national business associations, has urged the federal government to act on the findings of a pivotal report titled “On the Precipice – Help is Needed“, authored by Ian Lee, PhD, Associate Professor at Carleton University. This report delves into the profound impacts of Employment Insurance Premiums on small businesses.
As restaurants and small business owners navigate an affordability crisis, this report shines a spotlight on the challenges posed by higher EI Premiums amidst unprecedented cost pressures. It issues a compelling call to action to the federal government to address the escalating costs of running a small business in the current challenging economic climate. Bankruptcies among restaurants, accommodations, construction, and retail have doubled from 2019 to 2024.
This data has underscored the urgent need for the Federal Government to lower the Employment Insurance Premium rate to 1.58 percent, for small businesses and their employees, from the current rate of 1.66 percent.
“Restaurant operators, representing a CAD 114 billion dollar industry, as the fourth largest private employer, affirmed their commitment to reinvesting government-provided payroll tax relief into their businesses and workforce. This reinvestment would immediately take the form of improved wages, investments in training and development, or expanded hiring efforts,” said Kelly Higginson, President and CEO of Restaurants Canada.
“The foodservice industry is a powerhouse employer for Canadian communities and has demonstrated remarkable resilience. The livelihoods of countless employees, especially youth and newcomers, depend on the success of these establishments.”
In 2020, the government necessitated a freeze to EI Premiums for two years so Canadian businesses would not face increased costs while also dealing with additional expenses resulting from the pandemic. It has been done before; it must be done again.
“Lower EI premiums will channel more funds into the hands of the significant number of young workers, particularly in accommodation and food service roles, who make up a large portion of this industry, and rely on this income to fund their education,” said Ian Lee, PhD, Carleton University and the report’s author.
Restaurants Canada was backed by stakeholders who agree reducing EI premiums not only bolsters disposable income for employers and employees but offers an immediate support that will ensure small businesses can continue to operate, boost consumer confidence, and contribute to the economy.
