Retailers and other small businesses have welcomed news that the federal government will freeze employment insurance premiums for the next three years.
Premiums will remain at 2013 levels until 2016 as falling unemployment levels over the past few years has meant that insurance premiums no longer have to rise to pay for an EI deficit that had been accumulating since the global financial crisis, Finance Minister Jim Flaherty announced yesterday (September 9).
The changes are expected to save employers and employees $660 million in 2014. A worker earning $48,000 will save $24, while a small business owner employing 10 staff will save up to $340.
Diane Brisebois, president and CEO of the Retail Council of Canada, said, “This freeze on premiums will mean more money for employers to invest in other important areas such as employment, training and infrastructure.”
Dan Kelly, president and CEO of the Canadian Federation of Independent Business, said, “As employers pay 60% of the cost of the EI system, small firms can use these savings to hire, improve wages or help grow their businesses.”
Doug Porter, chief economist at BMO Capital Markets, also applauded the change, noting “it recognizes the fact that Canada’s EI account has improved markedly since the recession and its likely that no further increases in EI rates are needed.”
He added, “The announcement also leaves open the potential for cuts in the next two years.”
