ABOVE: The Conservative government came under fire in the House of Commons Thursday over their Small Business Job Credit
The opposition slammed the Conservative government’s Small Business Job Credit in Question Period Thursday after it emerged any credits the job created would cost half a million dollars each, and the government was actually costing the economy jobs by keeping EI premiums higher than they need to be.
The Tories, for their part, accused the opposition of not understanding the issue while repeating praise from a lobby group for the small businesses that will benefit from the credit.
A new Parliamentary Budget Office report has found that a Small Business Job Credit unveiled with fanfare by the federal Conservatives last month could actually mean fewer jobs in the economy in two years.
The job credit was designed to create jobs and help out small-scale employers by cutting the Employment Insurance premiums they’re required to pay.
But that policy won’t do much, the PBO’s analysis found: It’ll create a mere 800 net new jobs, at a cost to the government of $550,000 per person, per year.
“$550,000 to create a single job, and Conservatives think they’re brilliant at the economy,” NDP MP Nathan Cullen said during a heated exchange in the House of Commons Thursday.
“Half a billion dollars to create 800 jobs is outrageous.”
What’s more, the report argues, by keeping EI premiums high and creating that special credit for small businesses, the Tories’ plan could actually mean there are almost 10,000 fewer jobs in the economy two years from now than there would be if premiums were lower across the board.
The report also noted the extra cash in EI coffers could be better spent making EI accessible to more out-of-work Canadians: Right now, fewer than one in four unemployed people qualify for EI, thanks in large part to the increasing share of people who’d been doing temp work or stuck in long-term unemployment.
Responding to opposition attacks, Minister of State for Finance Kevin Sorenson accused the opposition of being out of their depth.
“Clearly, the NDP doesn’t understand small business,” Sorenson said in the House of Commons Thursday, before quoting a comment from the Canadian Federation of Independent Business that “small businesses in Canada should be thrilled with this announcement, because they told us time and time again that payroll taxes like E.I. are the biggest disincentives to hiring.”
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