It was a stunning conclusion. Despite word from the Canadian Federation of Independent Business that it would create “25,000 person years of employment,” it turns out the Conservative government’s “Small Business Job Credit” will only create an estimated 800 jobs. That works out to $687,500 per job created, since the “job credit” takes over a half of […]
It was a stunning conclusion.
Despite word from the Canadian Federation of Independent Business that it would create “25,000 person years of employment,” it turns out the Conservative government’s “Small Business Job Credit” will only create an estimated 800 jobs.
That works out to $687,500 per job created, since the “job credit” takes over a half of billion dollars from the Employment Insurance fund.
Yup. That’s exactly what the Parliamentary Budget Officer said last week.
And to make matters worse, the recent EI premium freeze for employers will lead to an estimated loss of 10,000 jobs, according to the PBO.
The math is pretty simple: 800 – 10,000 = a job creation plan that leaves us with 9,200 fewer jobs:
But guess who’s clinging to the analysis of the CFIB (which champions right-wing causes under the banner of small government) rather than accepting over the work of the PBO (whose mandate is to provide independent analysis to Parliament on the state of the nation’s finances and government estimates)?
Well, check out many times the Harper government named-dropped the business lobby group last week during Question Period:
Apparently, the CFIB is *the* definitive authority on job creation — the one group that “gets it” (“it” being small business, of course).
So where do these ideas on EI reform come from?
Well, an internal memo to the Minister of Human Resources and Skills Development in April 2013 in preparation for a meeting with the CFIB on EI reforms shows how long the business group has been lobbying the government to reduce EI contributions for employers:
“Since fall 2009, the CFIB has raised their concerns regarding the need to raise EI premiums in 2011 and subsequent years to reduce the accumulated deficit in the EI Operating Account. They participated in the Fall 2011 consultations on how the EI rate-setting mechanism can be further improved to ensure more stable, predictable rates. In particular, the following recommendations on rate-setting were made:
- Keep EI rates fixed at current levels, which would be simple and well-understood by Canadians, and would allow the EI Operating Account to break even by 2019-2020.
- Shift to balanced 50-50 split in premiums between employers and employees.
- Cap EI premium increases when rates are rising, but allow the premium rate to fall to break-even levels once any EI deficits are repaid and reserve targets are met.
- Adopt the EI hiring credit on a more permanent basis and expand it to include businesses with at least $15K in premiums. At a minimum, extend the hiring credit as long as rates are increasing…
In August 2012, the CFIB responded to pre-budget 2013 consultations by proposing the extension of the EI Hiring Credit (for as long as EI rates continue to increase) and improving access to foreign workers for small businesses.”
Meanwhile, a list of “suggested key messages” to the Minister in the memo, obtained by PressProgress under access to information, suggest the government wanted to spin giveaways to employers in the form of reductions in EI contributions as “job creation” measures — despite no real evidence the reductions actually create jobs.
According to the memo, “this temporary credit would be available to an estimated 560,000 employers, allowing these small businesses to reinvest approximately $225 million in job creation in 2013.”
No estimates on job creation numbers are offered in the 10-page memo.