September 15, 2014
OTTAWA – The Canadian economy remains stagnant, and the Conservatives’ EI plan will not encourage the hiring of new workers or produce the growth middle class Canadians need.
“Canadians deserve a plan for jobs and growth. The government’s EI rate reduction proposal provides neither,” said Liberal Party of Canada Leader Justin Trudeau. “Liberals instead propose that the EI benefit be given to businesses that actually hire new workers.”
Under Liberal governments, an EI premium exemption was provided to firms that actually hired new employees, and today, Liberals are proposing a benefit for every newly-hired worker in 2015-2016. With the Conservatives’ plan, only businesses with EI taxes below $15,000 would see savings – creating an incentive for businesses to fire workers.
“Mr. Harper and his government have announced an annual $225 million measure that is unlikely to produce even one job. The Liberal plan would represent a benefit of up to $1,279.15 for every hire, which for $225 million could produce over 176,000 new jobs,” said Mr. Trudeau. “Liberals believe that government must not only create the right conditions for economic growth, but also ensure that growth is sustainable and will finally help struggling middle class families.”
Canadian economists on the Conservatives’ EI proposal:
“…the proposed ‘Small Business Job Credit’ has major structural flaws that, in many cases, give firms an incentive to fire workers and cut salaries.” (Mike Moffatt, Mowat Centre)
“…the Conservatives have yet again eschewed a straightforward and effective measure and adopted one that is complicated and most likely to have little effect on employment or wages.” (Stephen Gordon, Laval University)
“It’s very poorly designed, if it were intended to support hiring or wage growth.” (Angella MacEwen, Canadian Labour Congress)
“It becomes a disincentive to growth.” (Jack Mintz, University of Calgary)
“…if you’re an employer and your payroll is slightly over that $550,000, you’ve got a strong incentive to cut your payroll.” (David Macdonald, Canadian Centre for Policy Alternatives)
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