The Evolution of Payroll Taxes in Canada: 1961 - 1993

• Main Authors: Lin, Zhengxi, Picot, Garnett, Beach, Charles M.
• Format: Report
• Language: unknown
• Subjects: Canada; Newfoundland
• Online Access: https://www150.statcan.gc.ca/n1/en/catalogue/11F0019M1996090

This paper outlines the structure of payroll taxes and documents evidence on the level, growth and role of each component over the last three decades for Canada and for each province. Levied by both the federal and provincial governments, payroll taxes in Canada include four major components: i) unemployment insurance (UI) premiums; ii) Canada/Quebec Pension Plan (C/QPP) contributions; iii) workers compensation (WC) premiums; and iv) the provincial health/post-secondary education (H/E) tax levied by Quebec, Manitoba, Ontario and Newfoundland. While the UI and C/QPP components are levied on both employers and employees, the WC and H/E components are levied on employers only. Our main findings are 1) payroll taxes have increased substantially over the last three decades in Canada as a whole and in every province; 2) the structure, level, growth and role of each component of payroll taxes vary remarkably from one province to another; 3) the expansion of the UI component in recent years has been the largest contributor to the rise in payroll taxes across every province in the country; and 4) despite significant growth in recent years, payroll taxes are still much lower in Canada than in most other western industrialized countries. Business performance and ownership, Corporate taxation, Employment insurance, social assistance and other transfers, Income, pensions, spending and wealth, Labour, Non-wage benefits, Personal and household taxation, Wages, salaries and other earnings