On Thursday September 11 Ottawa moved to cut employment insurance premiums for small businesses, promoting it as an effort that will save employers more than $550 million over the next two years and help stimulate hiring. Finance Minister Joe Oliver said the job credit will see EI premiums reduced to $1.60 for every $100 earned for 2015 and 2016, down from the current rate of $1.88. The credit, which is expected to reduce EI payroll taxes by nearly 15 per cent, will leave employers with more money to spur hiring and increase salaries, he said. The tax credit will not have any effect on EI premiums paid by workers. To be eligible, a business must pay equal to or less than $15,000 in employment insurance premiums next year and in 2016. The credit would amount to about $2,200 in savings each year for a company that, for example, employs 14 workers, each earning $40,000 a year, and pays $14,740 in EI premiums in 2014. A small business with three employees, each earning $25,000, would save about $295 a year from the year’s EI premium bill of $1,975. Dan Kelly, president of the Canadian Federation of Independent Business, said any help for small business owners is welcome. ” We think it’s well timed. The economy is good, more members are looking to expand than shrink but we’re not knocking the lights out from an economic perspective,” he said. “We really want to make sure that Canadian employers can create as many jobs as possible and invest in their employees as much as they can as well.” The group estimates the credit will create 25,000 new jobs over the next two years. The Canada Revenue Agency will be responsible for administering the changes to companies to about 780,000 firms in Canada that will qualify for the credit.
Sources Investment Executive; Canadian Federation of Independent Business.