Ottawa cuts employment premiums for small businesses for 2015, 2016

Ottawa announced Thursday that it will cut employment insurance premiums for small businesses for the next two years, a move it billed will save employers more than $550 million.

TORONTO — Ottawa announced Thursday that it will cut employment insurance premiums for small businesses for the next two years, a move it billed will save employers more than $550 million.

The Small Business Job Credit will reduce EI premiums to $1.60 for every $100 earned in 2015 and 2016, down from the current rate of $1.88, said Finance Minister Joe Oliver.

The credit is expected to reduce EI payroll taxes by nearly 15 per cent, and assist small business in hiring more employees or raising wages, said Oliver.

The tax credit will not have any effect on EI premiums paid by workers.

“We believe this will be very helpful on a macro basis,” Oliver said during the announcement at a small flooring company in west Toronto.

“When you reduce payment by half a billion dollars, you’ll have an impact. That’s what we’re looking for. We believe it will encourage growth and employment opportunities.”

He said the move was necessary to ensure that the Canadian economy continues to grow.

“We live in difficult economic times, and we cannot be complacent,” said Oliver.

“We must take action to empower Canadian entrepreneurs. Small business owners should be spending time growing their business and creating jobs, they should not be choking on red tape and high taxes.”

The Canada Revenue Agency will be responsible for administering the changes to companies that qualify, removing the need for extra paperwork from businesses.

To be eligible, a business must pay equal to or less than $15,000 in employment insurance premiums next year and in 2016. It’s estimated that about 780,000 firms in Canada will qualify.

The minister dismissed the suggestion that it was a sign that the federal government is worried about sluggish job growth.

“It’s not a sign of worry,” he said. “It’s a sign of confidence that we’re continuing on the right path.”

Despite his words, there are signs that the Canadian job market is not faring as well as anticipated.

Last week, Statistics Canada reported that the economy shed 11,000 jobs in August, most of them part-time positions. The figure was far below economist expectations for the creation of 10,000 jobs last month.

The agency said there were 112,000 private sector jobs lost in August, while self-employment rose by 87,000. The number of public-sector employees rose by 14,000.

The weak jobs data has also given Bank of Canada governor Stephen Poloz little reason to change interest rates any time soon. In his last announcement, Poloz said he was holding the central bank’s key interest rate steady at one per cent, a level where it’s been for the past four years.

Business groups have long called for a cut in employment insurance premiums, saying that the taxes have made it more difficult for smaller companies to hire new workers.

Dan Kelly, president of the Canadian Federation of Independent Business, estimates the credit will create 25,000 new jobs over the next two years.

“It’s a big, big deal for small business,” he said. “It’s good news for people looking for jobs, good news for those in companies where, perhaps, the business owners has had a more limited time in increasing their wages too.”

Just Posted

Driver who backed into Red Deer pizzeria sentenced

David Andrew Amstutz sentenced for failing to remain at the crash scene

Shaw getting ready to raise prices for its main residential service, CEO says

CALGARY — Residential customers of Shaw Communications Inc. will likely see a… Continue reading

Inflation accelerates as higher airfares, vegetable prices offset cheaper gas

OTTAWA — Canada’s annual inflation rate accelerated to two per cent last… Continue reading

Alberta couple wants cash and charges dropped in meningitis death of their son

CALGARY — An Alberta couple facing a second trial in the meningitis… Continue reading

Moose Jaw wants to challenge Norway for tallest moose statue title

MOOSE JAW, Sask. — The City of Moose Jaw, Sask., is on… Continue reading

Fashion Fridays: Inspirational gym outfits

Kim XO, helps to keep you looking good on Fashion Fridays on the Black Press Media Network

Inflation rises as higher airfares, veggie prices offset cheaper gas

Statistics Canada says inflation accelerated to two per cent in December

Canadian tattoo artist inks Toronto skyline on Blue Jays pitcher Stroman

Marcus Stroman found a way to show his appreciation for Toronto when… Continue reading

Team World sweeps opening day against Team North America at Continental Cup

LAS VEGAS — Team North America has some serious ground to make… Continue reading

SXSW to screen ‘Run This Town,’ which includes Rob Ford character

TORONTO — A drama that features a portrayal of the late Toronto… Continue reading

Fans buy ‘Little House on the Prairie’ star’s memorabilia

GENOA TOWNSHIP, Mich. — More than 200 items belonging to “Little House… Continue reading

Paying down debt should be priority for low income workers, say experts

TORONTO — Investment planning can often be seen as a luxury for… Continue reading

Russian fighter jets collide over Sea of Japan crews eject

One plane crashed after its crew ejected safely, the other crew also ejected but they have not been found

Judge to deliver verdict in British sailor’s gang rape case

The alleged gang rape took place at a Halifax-area military base in 2015

Most Read