After calling for a freeze of employment insurance (EI) rates in 2012, small business owners got a break with yesterday’s announcement that Ottawa will lower the expected EI premium rate increase by half.
Dan Kelly, senior vice-president for the Canadian Federation of Independent Business (CFIB), said, “It is clear Finance Minister [Jim] Flaherty has heard the concerns of Canada's entrepreneurs by taking action to lower the planned EI hike.”
In a release, the CFIB said it was pleased the government opted for a more modest EI premium rate increase of $0.07 per $100 in insurable earnings for employers and $0.05 for employees.
According to the CFIB this move will reduce the burden on business and leave more money in the pockets of their employees.
“In a fragile global economy, it makes good fiscal sense to support the job creators in Canada. But, as rates will still go up in 2012, the extension and expansion of the EI hiring credit in the next budget is crucial to help offset this premium increase," Kelly said.
CFIB is also urging Ottawa to proceed with a promised review of how EI rates are set.
“We are looking to the EI rate-setting consultation review to come up with solid recommendations to allow the EI system to work better during periods of economic uncertainty so we do not have to face increasing rates at the worst possible time,” concluded Kelly.
Jennifer Harrison
@JHarrisonBIV