Payroll TaxFor many years the NLEC has lobbied heavily for the elimination of the Health and Post Secondary Education Tax (HAPSET), commonly known as “payroll tax”. Due to the nature of taxing wages directly, HAPSET places downward pressure on salaries and employment. Newfoundland Labrador is the only province in Atlantic Canada with such a payroll tax, causing our province’s businesses to compete at a disadvantage.

The NLEC engaged in simultaneous public and private campaigns to demonstrate the negative effects of this tax on labour, receiving significant media attention. The NLEC was successful in achieving multiple increases in the HAPSET threshold, eliminating employers with less than $1.2 million of payroll from having to pay the uncompetitive tax. At the NLECs Provincial Employment Relations Summit on September 15th 2011, then Finance Minister Tom Marshall told delegates “I must say Richard Alexander has made the argument quite forcefully, and we’re listening. So watch the blue book. Maybe there’s some good things there.” The Progressive Conservative 2011 Blue Book election platform did indeed commit to work toward the elimination of HAPSET by raising the exemption incrementally, reducing the value of the tax by $10 million per year for the next four years. The Liberal Party also committed to increase the HAPSET threshold from $1.2 million to $3 million. Since that time the NLEC has continued to stress the need for government to live up to this commitment over the long-term.

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News items relating to Reducing the “Payroll Tax” with a promise of elimination

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