Restaurants Canada calls for reduction in EI premiums

Restaurants Canada, along with the Canadian Federation of Independent Business and the Tourism Industry Association of Canada, urges the federal government to lower the employment insurance (EI) premium rate to 1.58 per cent, for small businesses and their employees, from the current rate of 1.66 per cent.

The call is in response to the report, “On the Precipice – Help is Needed,” by Ian Lee, PhD, associate professor at Carleton University, which delves into the profound impacts of EI premiums on small businesses.

As restaurants and small business owners navigate an affordability crisis, the report shines a spotlight on the challenges posed by higher EI premiums amidst unprecedented cost pressures. Bankruptcies among restaurants and accommodations, construction and retail doubled from 2019 to 2024.

“Restaurant operators, representing a $114 billion 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.

“Lower EI premiums will channel more funds into the hands of the significant number of young workers, particularly in accommodation and foodservice roles, who make up a large portion of this industry, and rely on this income to fund their education,” said Lee.

Download the full report here.