Canada Minister of Finance Joe Oliver announced last month that the government was taking action to help small businesses across the country.
Oliver introduced the small business job credit which, according to federal government officials, will save small businesses more than $550 million over the next two years.
Battlefords-Lloydminster MP Gerry Ritz is calling the move a great way to help not only small businesses in his riding, but small businesses right across the province.
“This government recognizes that small businesses are the backbone of the economy,” he said. They are the people that hire and fire people, and participate in government programing.
“Everyone will agree that EI is a payroll tax, and by lightening that load for small businesses in the country, those small businesses will be able to hire more workers.”
The Small Business Job Credit will lower small businesses’ Employment Insurance (EI) premiums from the current legislated rate of $1.88 to $1.60 per $100 of insurable earnings in 2015 and 2016.
According to government documents, almost 90 per cent of all EI premium-paying businesses in Canada will receive the credit, reducing their EI payroll taxes by nearly 15 per cent.
Ritz said that the government considers businesses that make under $500,000 a small business. “The good news is that this tax credit does cover over 90 per cent of all businesses in the country,” said Ritz. Ritz said that small businesses in his riding have told him that this was a much needed move on the part of the federal government.
“The biggest problem in my riding is, of course, finding bodies and keeping up with the demand when the economy takes off,” he said. “Certainly the oilpatch is driving that and, of course, the agriculture sector as well is driving the push as well.”
This will ensure that EI premiums are no higher than needed to pay for the EI program over time, according to Ritz.
“In total, small businesses have seen their taxes reduced by 34 per cent since taking office in 2006,” said Ritz, “The introduction of this new tax credit builds upon our government’s strong support of small businesses within Canada.”