Why tax the Island's working poor?
For more details
Tax Fairness for Islanders
Action Alert
Small business & minimum wage
Presentation to Standing Committee
While poverty is a legitimate issue, dramatic increases to minimum wage are not the solution.
According to Statistics Canada, only 5% of workers earn minimum wage. Typical, these are young workers in their first jobs who live at home with family.
But while most businesses don't pay minimum wage, only 35% say they aren't impacted by minimum wage increases. Minimum wage hikes often put pressure on the wages for other workers and also mean increases to payroll taxes like WCB, EI and CPP. This forces many small businesses to make adjustments in their operations. Some increase prices to recoup the additional costs but many have to cutback staff hours or their number of employee.
An effective way of helping the working poor, without harming small businesses and their employees, is to increase the basic personal exemption (the amount income taxpayers are allowed to keep tax-free). In PEI, workers are only allowed to keep $7,708 before they start paying taxes- the lowest in the country. Not only that but government doesn't automatically increase that amount every year to account for inflation and the lower purchasing power of that $7,708.
CFIB continues to challenge government to increase the basic personal exemption and take low- and fixed-income earners off the tax rolls. Check out our Action Alert "Tax Fairness for Islanders" to learn more.
