PARLIAMENTARY BUDGET OFFICE TRASHES CONSERVATIVE EI SCHEME! The Parliamentary Budget Office (PBO) released a report today that makes a sad joke of the way the Harper government is handling Employment Insurance (EI) payroll taxes. In 2011, while Canada was struggling (and we still are) with inadequate job creation following the 2008 recession, the Harper government started to increase its job-killing EI payroll taxes – by more than $600-million cumulatively every year. Last year, they imposed a three-year freeze on the premium rate at the new, higher and obviously excessive level to which it had escalated. At the bottom line, this means the Harper regime has collected well over $5-billion in additional EI revenues since 2011, and if its inflated rate remains frozen in place (as planned) until 2017, it will rake-in further excess revenues of another $5-billion. This is just one of the facts revealed by today’s PBO analysis. If EI premium rates were to match existing program costs, the rate for 2015 would drop across the board by about 7%, and in 2016 by nearly 15%. But that’s not Mr. Harper’s plan. He is maintaining his higher-than-necessary, job-killing EI payroll taxes for at least another two years. And in the meantime, he has devised a deeply-flawed short-term EI tax credit aimed exclusively at small employers who agree to stay small. The way this credit is designed, it is disconnected from new job creation and the employer’s payroll needs to stay below a certain cap (i.e., the equivalent of about 12 -15 employees). Perversely, if a firm wants to grow beyond that – creating more jobs – they will be penalized by losing the credit entirely. Despite new job creation not being a condition for getting this tax credit, the government predicted it would generate some 25,000 jobs coincidentally. The PBO has destroyed that myth. It says the program can be expected to produce a meagre 200 jobs in 2015 and just 600 in 2016 – while costing $550-million over those two years. That’s a huge toll for a negligible gain. Given the foolish way the government credit is set-up, most observers think it is really intended for two other, more political purposes: (a) To serve as a consolation prize for small businesses who are deeply angry at the government for the way it has so mangled the Temporary Foreign Workers Program; and (b) To appear to be doing something for small businesses while still collecting billions of dollars in extra EI revenues to pad its accounts as is declares a surplus next spring. The PBO makes this very powerful point – by keeping EI rates at excessively high levels over the next two years, the Harper government will effectively kill 2,000 jobs in 2015 and a further 8,000 jobs in 2016. So add it all up. Mr. Harper’s ludicrous EI policies will cost taxpayers $550-million in unproductive expenditures, employers and employees will pay some $5-billion in excess taxation, and the country will lose a net 9,200 jobs. And this man claims to be an economist?
Posted on: Sat, 11 Oct 2014 02:55:05 +0000
Trending Topics
Recently Viewed Topics
© 2015