Newspaper article The Canadian Press

Editorial Exchange: Tories' Job-Creation Scheme Falls Short

Newspaper article The Canadian Press

Editorial Exchange: Tories' Job-Creation Scheme Falls Short

Article excerpt

Editorial Exchange: Tories' job-creation scheme falls short

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An editorial from the Toronto Star, published Sept. 15:

For one tantalizing moment, it looked as if Joe Oliver was going to cut employment insurance premiums.

The anticipation quickly died. All the federal finance minister announced was that the government was giving small business owners a two-year payroll tax break. Workers will have to wait until 2017 for lower EI premiums. So will large companies that do most of the hiring.

Beginning next January, enterprises with fewer than 20 employees will pay 15 per cent less into the EI fund. But the workers they hire won't get any payroll tax relief. Neither will the other 19 million members of Canada's labour force.

"Small businesses drive Canadian prosperity," Oliver explained at a hardwood flooring outlet in west Toronto. "Our new Small Business Job Credit will lower taxes for business owners and make it easier for them to create jobs for Canadians."

The Canadian Federation of Independent Business, which had been lobbying for EI relief for months, was delighted. Its president estimated that the credit would 25,000 new jobs over two years.

Economists - even those friendly to the Conservative government - were skeptical. Business leaders warned that the tax break could actually deter job creation. Small employers would stay small, they argued, to qualify for the EI premium break.

Oliver, who is anticipating a $6 billion-to-$8 billion surplus next year, could have done much more - and chosen better means - to spur employment growth:

He could have made his tax credit contingent on hiring. As it now stands, entrepreneurs can pocket the savings without creating a single job.

He could have cut EI premiums across the board, injecting broadly based stimulus into Canada's sluggish economy.

He could have opened the EI program to the 63 per cent of jobless who don't qualify for coverage. …

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