EI premiums: Joe Oliver announces cuts for small businesses

Written By Unknown on Kamis, 11 September 2014 | 22.39

Faced with stubbornly sluggish job growth numbers, Finance Minister Joe Oliver has announced a cut in employment insurance premiums for small businesses.

Businesses that pay up to $15,000 in EI premiums will benefit from the break, which reduces the EI premium from $1.88 per $100 of payroll to $1.70. That is a drop of 15 per cent in EI costs

Oliver estimates about 780,000 Canadian businesses will benefit from the credit, which takes effect in the 2015 tax year.

"Small businesses drive out prosperity and give back to our communities," Oliver said, speaking at a small family-owned business in Toronto called Value Wood Products.

He estimated small businesses provide half of private sector jobs.

The cut would take effect Jan. 1, 2015 and remain in effect through 2016.

Employers  especially small businesses — have been clamouring for another break from the Harper government. Previous budgets have offered temporary programs rebating employment insurance (EI) premiums for small businesses who grew their payroll under otherwise difficult business conditions.

A year ago, the government froze EI premiums for employees at $1.88 per $100 of earnings. Employer contributions are 1.4 times that amount.  The premium freeze was intended to hold for the next three years, as the government's finances improved.

Oliver's move comes amid anemic job growth over the past year. More than 100,000 jobs were lost in the private sector last month — the highest one-month drop on record. The bleak numbers may have proved too dire for the government to ignore.

While small businesses are likely to welcome Thursday's move, as will their employees, some labour groups may see it as a wrong step. They have argued lower premiums could make the program less available at a time of persistent unemployment, which now sits at seven per cent nationally.

The Conservative government is gearing up for an election in 2015, hoping to focus on economic issues and, in particular, items that hit the pocketbook of everyday Canadians.  

Gloomy job numbers make it tough to convince voters they are better off with the Conservatives at the helm.


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