New tax relief will save small businesses more than half a billion dollars over two years
Brandon, MB - Larry Maguire, Member of Parliament for Brandon-Souris highlighted the news that Joe Oliver, Minister of Finance announced today the introduction of the new Small Business Job Credit. This new measure is expected to save small businesses more than $550 million over the next two years.
MP Maguire said, "Our Government recognizes the fundamental importance of small businesses in fueling our economy. This new measure will assist local business hire new employees and create new jobs in Southwestern Manitoba."
The Small Business Job Credit will effectively 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. Any firm that pays employer EI premiums equal to or less than $15,000 in those years will be eligible for the credit. Almost 90% of all EI premium-paying businesses in Canada will receive the credit, reducing their EI payroll taxes by nearly 15%.
The Canada Revenue Agency will automatically calculate the credit on a business' return, ensuring no new paper burden will be imposed on business owners.
In addition, all employers and employees will benefit from a substantial reduction in the EI premium rate in 2017 when the new seven-year break-even rate-setting mechanism takes effect. This will ensure that EI premiums are no higher than needed to pay for the EI program over time.
"This is a big one," said Dan Kelly, President of the Canadian Federation of Independent Business. "This announcement will result in a 15% net reduction in Employment Insurance premiums paid by small businesses over the next two years. I couldn't be more pleased to stand beside Finance Minister Oliver as he announces half a billion for small firms in payroll tax cuts-the most harmful form of taxation affecting job creation and employee wages. A 15% reduction in EI premiums will make it easier to hire new workers or invest in additional training to help entrepreneurs grow their business."
- Canada has created more than 1.1 million net new jobs since the height of the recession-one of the strongest job creation records in the Group of Seven (G-7).
- In 2013, Canada leapt from sixth to second place in Bloomberg's ranking of the most attractive destinations for business.
- According to KPMG, total business tax costs in Canada are the lowest in the G-7 and 46% lower than those in the United States.
- In September 2013, the Government announced a three-year freeze of the EI rate at its 2013 level of $1.88 to prevent it from rising to $1.93 in 2014, saving employers and employees an expected $660 million in 2014 alone.