Editorial: Canada’s onerous business cost burden

Surviving a global pandemic is just the latest barrier to business survival in Canada.

The country’s costs and complexities of doing business have been major barriers for decades, and governments at every level are doing little to remove them.

Canada’s byzantine tax regime, with an Income Tax Act that started at 10 pages but was last seen heading to 3,230, is one; its interprovincial trade barriers are another.

Add to all of the above the increasingly onerous payroll compliance requirements, and survival in the pandemic economy keeps getting more precarious.

The cost of B.C.’s employer health tax is the latest layer in that multilayered payroll burden.

PwC’s Payroll in Focus: The Cost of Employer Compliance and Public Policy Implications provides insight into the myriad other layers. The report notes, for example, that more than 200 rules connected to that legislative compliance cost employers an estimated $12.5 billion annually.

But, as PwC points out, that is just the tip of a very large iceberg because armies of government auditors are needed to navigate compliance complexities to ensure they are being correctly followed.

There is also far more than money involved here for an economy already severely compromised by the global pandemic. The billions siphoned off in compliance complexities are billions that are diverted from investment in business infrastructure and innovation. That penalizes future economic growth and marketplace leadership.

The Canadian Payroll Association is therefore pushing hard for government to deliver on its post-pandemic “build back better” promise and ensure that payroll compliance costs are reduced through such measures as simplifying Canada’s tax system, harmonizing its payroll policies and implementing a digital payroll system.

For Canada’s 1.5 million employers, those actions would improve their chances of survival; for the country’s economy, they would improve the chances of a robust post-pandemic recovery.