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

SUV smashes through fences and deck in Anders

Driver taken to hospital after SUV veered off 30th Avenue into Anders

Red Deer’s new ‘equity co-ordinator’ will promote tolerance

Andrea Lacoursiere was hired by city with Alberta Human Rights funding

More bridge work this summer in Red Deer’s Coronation Park

The park’s north bridge is being rebuilt to ensure safety

Man badly injured in off-road vehicle collision on Saturday

Incident happened in Mountain View County about 10:50 p.m.

Heat warning in effect for Central Alberta

Environment Canada has issued a heat warning for Central Alberta. Residents in… Continue reading

CFIA inspects after video shows pigs crammed into B.C. transport truck

The video shows pigs piled on top of one another in a transport truck on a “sweltering” hot day last week

‘City of icebergs:’ Study says 100s of Arctic glaciers shrinking, disappearing

The statistics in her recently published paper say it all: hundreds of… Continue reading

U.S. hits back with WTO challenge against Canada’s retaliatory tariffs

OTTAWA — The United States fired back Monday at the Canadian government’s… Continue reading

Croatia gears up to give heroes’ welcome to World Cup team

ZAGREB, Croatia — Fans are pouring in from throughout the country as… Continue reading

Statelessness a hurdle for some rescued Thai boy

MAE SAI, Thailand — The 12 boys and coach of the Wild… Continue reading

Lobbying commissioner rejects complaints against firearms panel member

OTTAWA — A federal watchdog has dismissed complaints that a mass-shooting survivor… Continue reading

CREA reports June home sales down 10.7% from year ago, but up from May

OTTAWA — The Canadian Real Estate Association says the number of homes… Continue reading

Red Deer Royals place second at Calgary Stampede parade

Royals depicted life in forest and portrayed destruction by human beings

Muslim candidates running in record numbers face backlash

SPRINGFIELD, Mass. — A liberal woman of colour with zero name recognition… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month