The Evolution of Payroll Taxes in Canada: 1961-1993

Statistics Canada Working Paper 90

25 Pages Posted: 29 Apr 1998  

Zhengxi Lin

Statistics Canada

Garnett Picot

Statistics Canada

Charles M. Beach

Queen's University - Department of Economics

Date Written: 1996

Abstract

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.

JEL Classification: H24, H71, N32

Suggested Citation

Lin, Zhengxi and Picot, Garnett and Beach, Charles M., The Evolution of Payroll Taxes in Canada: 1961-1993 (1996). Statistics Canada Working Paper 90. Available at SSRN: https://ssrn.com/abstract=4113 or http://dx.doi.org/10.2139/ssrn.4113

Zhengxi Lin (Contact Author)

Statistics Canada ( email )

Ottawa, Ontario
Canada
613-951-0830 (Phone)
613-951-5403 (Fax)

Garnett Picot

Statistics Canada ( email )

Ottawa, Ontario
Canada
613-951-8214 (Phone)
613-951-5403 (Fax)

Charles M. Beach

Queen's University - Department of Economics ( email )

99 University Avenue
Kingston K7L 3N6, Ontario
Canada K7L 3N6
613-533-2278 (Phone)

Paper statistics

Downloads
72
Rank
268,250
Abstract Views
1,093