• CTF reacts to "EI Rate Freeze" trial balloon from Ottawa
• CTF analysis shows crushing payroll tax burden continues to rise
• EI fund surplus now stands at $35 billion

OTTAWA: The Canadian Taxpayers Federation (CTF) has responded to media reports that Ottawa is considering a freeze of EI premium rates for 2002 instead of further employment insurance (EI) rate cuts as promised.

Job Killers
"Payroll taxes are profit-insensitive, job-killers. CPP premiums will rise next year by another 11.8% and Canada is in the midst of a recession. The federal government has a moral obligation to uphold its EI tax cut promise," stated CTF federal director Walter Robinson.

The CTF also sourced an old quote from finance minister Paul Martin on the issue of payroll taxes. On October 17, 1994, Mr. Martin told the Toronto Star:

We believe there is nothing more ludicrous than a tax on hiring. But that's what high payroll taxes are. They have grown dramatically over time. They affect lower wage earners much more than those at the high end.

Payroll Taxes - Through the Liberal Mandate
"Our analysis shows that while Minister Martin has talked the talk on payroll taxes, both he and various HRDC ministers haven't walked the walk," added Robinson.

"This decade long hike in payroll taxes has stunted economic growth, depressed workers wages and restricted employer investment - who pay 1.4 times the employee rate for EI," added Robinson. "And it has proved doubly detrimental to the 19% of Canadians who are self-employed as they pay both the employee and employer contributions for CPP and EI."

The EI Surplus
"All the more discouraging is the fact the government continues to benefit from the EI cash cow as the EI fund surpluses are rolled into consolidated general revenues," said Robinson. "Indeed, this year alone, Ottawa will collect almost $8 billion more in EI taxes than it will pay out in benefits."

"The bottom line for Canadian workers and employers is clear: the federal government must continue to cut EI taxes," Robinson concluded.