Canadian Payroll Reporter

6 Canadian HR Reporter, a Thomson Reuters business 2018 News February 2018 | CPR While the Finance Ministry mostly keeps the content of the federal budget secret until the fi- nance minister tables it (no date has been announced yet), the House of Commons Standing Committee on Finance recently released a series of budget rec- ommendations. The wish list is based on submissions it received last summer and fall during pre- budget consultations. The 92 recommendations cover a variety of topics, some of which could affect employers. They include: • The government should intro- duce pay equity legislation for federally regulated workplaces and work with the provinces/ territories, as well as the pri- vate sector, to close the gender pay gap in Canada. The federal government has said it plans to table "proactive" pay equity legislation by the end of 2018. A proactive approach focuses on ensuring that em- ployers are complying with pay equity rules rather than relying on employees to make com- plaints about wage discrimina- tion. During pre-budget consulta- tions, groups such as the Cana- dian Labour Congress (CLC) called for pay equity changes. "The 2017 budget noted that Canada has one of the highest gender pay gaps among OECD countries. However, the budget did not include any measures to ensure equal pay for work of equal value," said the CLC. "Budget 2018 should an- nounce that the federal govern- ment will introduce pay equity legislation immediately, as per the recommendations of the 2016 Report of the Special Com- mittee on Pay Equity," it said. • The government should re- view the Social Security Tri- bunal and consider restoring the EI Boards of Referees, the EI Umpire, the CPP and Old Age Security (OAS) Review Tribunals, and the Pensions Appeals Board. The previous government replaced those bodies with the Social Security Tribunal in 2013. Labour groups have com- plained that the tribunal is ineffective and that it dehu- manizes the appeals process. "This tribunal system is poorly structured, poorly managed, and does not respect basic notions of fairness and justice," the Cana- dian Union of Public Employees told the committee. • The federal and provincial/ter- ritorial governments should work together to introduce a national prescription drug program. • The government should make the Temporary Foreign Work- er program more efficient. It should also make it easier for employers in good standing to hire workers under its Seasonal Agricultural Worker Program. • The government should work with stakeholders and make targeted investments to strengthen apprenticeship and training programs to reflect economic changes, including supporting green trades. The committee did not rec- ommend all of the suggestions that business and labour groups put forward. Among the recom- mendations not accepted were the following: • The Confédération des syn- dicats nationaux (CSN), a Quebec-based trade union organization, called for the government to reduce a de- duction that individuals may claim for stock option tax- able benefits. Employees who receive stock option taxable benefits can claim 50 per cent of the taxable benefit under certain circumstances. •Restaurants Canada suggested that the government imple- ment a 12-month EI premium holiday for businesses that hire young people, as prom- ised during the 2015 election campaign. • The Canadian Chamber of Commerce recommended that the government reduce EI premiums to $1.49 per $100 of insurable earnings, as the pre- vious government promised to do as of 2017. • The Canadian Federation of Independent Business called for changes to the way EI pre- miums are structured. It rec- ommended either a 50/50 split between employers and em- ployees or a permanently lower rate for small businesses. • The Quebec Employers' Council suggested an EI con- tributions credit for training expenses, focused on formal training associated with new investments. • The CLC called for the gov- ernment to increase the EI benefit rate from 55 per cent of insurable earnings to at least 60 per cent. It also rec- ommended that there be one national eligibility standard for regular benefits, set at 360 hours. The current threshold to qualify for regular benefits ranges from 420 hours to 700 hours, depending on the eco- nomic region of the country. • An organization called Canada Without Poverty recommend- ed that the government set national wage standards with a goal of implementing a living wage, indexed to the consum- er price index. The CLC also called on the government to implement a federal minimum wage, something it has not had since the 1990s. • The CLC recommended that the government change the rules for EI sickness benefits to help workers coping with episodic or long-term illnesses by allowing them to top up the benefits. Whether Finance Minister Bill Morneau accepts any of the recommendations from the committee or the other groups will not be known until he re- leases the 2018 budget. So far, he has revealed little about what may be in the budget other than providing some general themes. In an interview with the Ca- nadian Press in December, Mor- neau said he was considering budget measures that would help women achieve greater eco- nomic prosperity, assist workers in obtaining the skills needed for increasingly automated work- places, and use science to benefit the economy. He did not say whether the government would make any changes affecting payroll deduc- tions, beyond the CPP measures already planned for 2019. Prior to last year's budget be- ing released, there was specula- tion that the government would implement taxable benefit changes aimed at making the tax system fairer. Media atten- tion focused on the possibility that employer-paid premiums for employee health and dental plans would become taxable. However, when Morneau tabled the budget, he ignored health premiums and proposed changes to other taxable benefits and allowances. The changes in- cluded eliminating a deduction that employees could claim for taxable home relocation loans that they received from their employer, beginning in 2018. He also announced that in 2019, the government would eliminate tax exemptions for non-accountable expense allow- ances paid to members of pro- vincial and territorial legislative assemblies and to certain mu- nicipal office-holders. Further changes to taxable benefits could be included in this year's budget. Last fall, there was a lot of publicity around possible changes to the tax treatment of merchandise discounts provid- ed to employees. During the finance commit- tee's consultations, the Retail Council of Canada said it was worried that the Canada Revenue Agency (CRA) would start treat- ing employee discounts as a tax- able benefit in 2018. The change would have been a departure from the CRA's long-standing practice of allowing employers to sell merchandise to their employ- ees at a discount without workers incurring a taxable benefit, unless the selling price was below cost. In response, the government said the rules for merchandise discounts would not change. The CRA later announced that it would review its Income Tax Folio S2-F3-C2, Benefits and Allowances Received from Em- ployment, which made refer- ence to the rule change. Morneau reveals little, other than general themes from BUDGET on page 1 News The committee did not recommend all of the suggestions that business groups put forward.

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