Close X
Wednesday, November 13, 2024
ADVT 
National

Conservative changes to EI could cost Canada jobs, Budget watchdog warns

Darpan News Desk The Canadian Press, 09 Oct, 2014 11:42 AM

    OTTAWA - The Harper government's $550-million small-business job credit will create just 800 net new jobs in 2015-16, while a freeze in employment insurance premiums could cost the economy 10,000 jobs over the same period, Canada's parliamentary budget office says.

    The latest report from the budget office says the credit will create a total of about 1,000 "person-years" of work, at a cost of $555,000 for each person-year.

    The report also says that because EI premiums are frozen at higher levels than necessary to offset the costs of the job credit, thousands of jobs could be lost as a result.

    "PBO estimates the premium rate freeze will reduce full-time equivalent employment by 2,000 jobs in 2015 and a further 8,000 jobs in 2016," the report said.

    Starting next year, the job credit will effectively lower EI premiums for small businesses with annual contributions of less than $15,000.

    Critics of the measure have complained the government should have gone further with a direct cut in premiums that would provide an immediate benefit to all businesses and employees.

    That broader slash to payroll taxes isn't happening until 2017, the government has indicated.

    The Conservatives haven't said why they're waiting for two years to implement that cut; the PBO report says EI premiums are currently 13 cents above the break-even level and will be 28 cents above the break-even level in 2016.

    In 2017, the report says, EI premiums will start to go down, eliminating the surplus in the EI operating account.

    Finance Minister Joe Oliver said the small-business job credit would benefit about 780,000 Canadian businesses when he announced the measure last month, but he didn't provide a job creation estimate.

    The Canadian Federation of Independent Business, on the other hand, praised the announcement, estimating it would create 25,000 person-years of work over the next two to three years.

    CFIB head Dan Kelly said he was puzzled by the PBO report, saying it's out of line with estimates from the organization's chief economist.

    "I think their numbers are off," he said in an interview.

    "I mean, this is a half a billion dollars back into the economy through essentially a payroll tax reduction, the most harmful form of tax to small- and medium-sized firms .... this has got to have a lot more impact than that."

    Kelly adds small business owners are "incredibly positive" about the small business tax credit.

    The opposition, meantime, pounced on the report.

    "This represents gross waste and mismanagement; it's a fiasco," said Scott Brison, the Liberal finance critic.

    "At a time when growth has stalled and the job market is soft, the Conservatives' high job-killing payroll taxes are making things worse. They're keeping EI premiums high to pad their books before an election and to fund programs aimed at getting votes."

    Nathan Cullen, the NDP's finance critic, was equally scornful.

    "Time and again, we've seen Liberals and Conservatives misuse EI funds that belong to workers and employers," he said in a statement.

    "Now Conservatives are using these funds for a credit that won't even do what it's supposed to — create more jobs for Canadians."

    MORE National ARTICLES

    PEI joins national securities regulator plan, five provinces now on board

    PEI joins national securities regulator plan, five provinces now on board
    OTTAWA - Prince Edward Island has joined Ottawa's move to create a national securities regulator, bringing the total to five provinces who have signed onto the plan.

    PEI joins national securities regulator plan, five provinces now on board

    Canadians are Increasingly Googling on their Smartphones as they Shop

    Canadians are Increasingly Googling on their Smartphones as they Shop
    TORONTO - Most Canadians will be armed with their smartphones while shopping this holiday season and likely won't pull the trigger on purchases without launching a few quick searches first, suggests new research released Thursday.

    Canadians are Increasingly Googling on their Smartphones as they Shop

    NDP staffers join new union, split with Unifor over strategic voting

    NDP staffers join new union, split with Unifor over strategic voting
    OTTAWA - More than 600 federal NDP political staffers have chosen a new union home that will give unequivocal support to their party.

    NDP staffers join new union, split with Unifor over strategic voting

    Polaris Prize Winner Tanya Tagaq Says She Was Racially, Sexually Harassed in Winnipeg

    Polaris Prize Winner Tanya Tagaq Says She Was Racially, Sexually Harassed in Winnipeg
    WINNIPEG - A prize-winning throat singer says she was sexually harassed and called "a sexy little Indian" while in the Manitoba capital recently.

    Polaris Prize Winner Tanya Tagaq Says She Was Racially, Sexually Harassed in Winnipeg

    Conservatives proposing plan to allow use of journalistic work in political ads

    Conservatives proposing plan to allow use of journalistic work in political ads
    OTTAWA - The Conservative cabinet is considering a plan that would allow political parties to use the work of journalists in its political advertising without permission or compensation.

    Conservatives proposing plan to allow use of journalistic work in political ads

    Former Grit foreign affairs minister upset by Liberal opposition to Iraq mission

    Former Grit foreign affairs minister upset by Liberal opposition to Iraq mission
    OTTAWA - Former foreign affairs minister Lloyd Axworthy says he's perplexed and disappointed that federal Liberals have effectively turned their backs on the responsibility-to-protect doctrine championed by a previous Grit government.

    Former Grit foreign affairs minister upset by Liberal opposition to Iraq mission