Most years see important changes to employment law in Canada, and 2023 is no exception.
Employers that want to continue growing their business and maintaining a stable workforce need to understand upcoming changes to the law and how it will affect them in 2023 — and beyond.
This year will see several major differences in Canadian employment, including minimum wage increases, a ban on foreign property buyers and higher payroll deductions for Canadian workers, among other changes.
Ancaster’s Stephen Gleave, a Canadian employment lawyer, offers some helpful explainers of these new rules and how employers can navigate them.
Higher payroll deductions
First off, it’s important to understand that Canada Pension Plan (CPP) contributions and employment insurance (EI) premiums will increase this year. That means less take-home pay for Canadian workers.
“It’s important to make sure that employees understand ahead of time exactly what is changing with their paycheck and why it’s changing,” Gleave said. “Employers will want to make sure they let their employees know it’s the government that is making this change.”
The Canada Revenue Agency said in November that the employee and employer CPP contribution rates will rise from 5.70 per cent in 2022 to 5.95 per cent in 2023. What does that mean? It will result in the maximum employee contribution to the CPP plan for 2023 reaching $3,754.
The Canadian Federation of Independent Businesses says the CPP and EI contribution increases mean that every Canadian worker will see up to $305 less in annual take-home income next year.
Two-year ban on foreign homebuyers
Equally important will be the new ban on foreign homebuyers, which took effect on January 1 of this year.
It means that foreign commercial enterprises and buyers will not be allowed to buy residential properties in Canada for two years.
The Canadian Parliament decided to approve the ban in summer 2022. It’s an effort to address housing shortages and affordability issues, including in Ancaster, Stephen Gleave said.
But many people can still find exemptions from the new rule, he added. That includes buyers who have temporary work permits, or international students who meet certain criteria, or refugees.
“Those buyers interested in making a purchase in less than two years should consult an employment lawyer to find out if they qualify for one of the exceptions,” Ancaster’s Stephen Gleave said.
Federal carbon price increase
Another big change for employers will involve the federal government’s carbon pricing. It will increase from $50 per tonne to $65 per tonne on April 1, 2023.
That will result in an increase of about 3 cents per liter of gas, according to The Canadian Taxpayers’ Federation. It’s changing from the current price of 11.05 cents per liter to 14.31 cents per liter.
What does that mean for families and the people who drive to work every day? It will likely result in Canadians paying nearly $11 more every time they fill up a minivan, or a vehicle with a fuel capacity of 76 liters. That’s an increase of about $2.48, according to The Canadian Taxpayers’ Federation report.
But that’s not the only hit coming to the pocketbooks of Canadian drivers. Additional clean fuel regulations taking effect on July 1 are also expected to increase the price of gas, Ancaster’s Stephen Gleave said.
“These additional regulations will likely require gasoline and diesel producers as well as importers to reduce the intensity of their fuel,” Gleave said.
Those are the most important changes coming to employment law in Canada in 2023 — but not all of them, Gleave said. Employers need to make sure they’re up to date on all new regulations affecting their industry.
“If not, a local employment lawyer can likely help them sort it all out,” he said.