Canada column published on Sunday, Jan. 1/12
THE CANADIAN REPORT
(c) By Jim Fox
Canadian businesses are getting a New Year’s bonus from the government while taxpayers will be paying more.
Corporate tax rates are being lowered to 15 percent from 16.5 percent effective today in a bid to stimulate new investment and create jobs, Finance Minister Jim Flaherty said.
The federal government is, however, increasing the amount deducted from personal paychecks for Employment Insurance and Canada Pension Plan contributions.
The increases to pay for jobless benefits and pensions result in a combined total of $306 a year more in payroll taxes. Employers will also pay more for their share for their employees.
In order to head off a depletion of funds in the Employment Insurance program, a government-appointed committee had recommended an even higher rate increase.
As well, the government is moving ahead with a plan to cut spending by $4 billion over the next several years to tackle the spending deficit now at $31 billion in the current year.