The federal government has reduced the amount small businesses must pay in employment insurance (EI) premiums.
Finance Minister Joe Oliver announced September 11 that businesses paying $15,000 or less in EI premiums in 2015 and 2016 are eligible for a new credit.
The Small Business Job Credit reduces EI premiums from $1.88 to $1.60 per $100 of insurable earnings over the next two years.
Oliver said the credit is expected to save small businesses more than $550 million throughout 2015 and 2016.
But Unifor, the largest private sector union in Canada, criticized the cuts, noting fewer people are eligible for EI benefits already.
Unifor National president Jerry Dias said in a statement the federal government should be focused on increasing access to benefits for unemployed Canadians.
The Canadian Federation of Independent Business (CFIB) praised the move, stating the credit would reduce premiums small businesses pay by 15%.
In a statement, CFIB president Dan Kelly described EI premiums as “the most harmful form of taxation affecting job creation and employee wages.”
But Dias rejected Kelly’s assertions that cutting EI premiums would stimulate the economy.
"If Stephen Harper is serious about job creation then he needs to work with labour and business to develop plans that will reinvigorate industry and stimulate the economy in meaningful ways," he said.
"It is ridiculous that the Conservative government's strategy to create jobs is essentially being done on the backs of unemployed workers in Canada.”
The Ministry of Finance said almost 90% of small businesses paying EI premiums would get the credit.
Meanwhile, Oliver also highlighted the impending introduction of a seven-year break-even rate-setting mechanism that takes effect in 2017, once the new credit ends.
The rate-setting mechanism would “ensure that EI premiums are no higher than needed to pay for the EI program over time,” according to the Ministry of Finance.
