Finance Minister Jim Flaherty
An upcoming payroll tax increase for workers and employers was cancelled Monday, but Malpeque MP Wayne Easter says while this may be a positive move, it comes on the backs of seasonal workers.
Finance Minister Jim Flaherty announced Monday a planned five per cent increase to employment insurance premiums that was to come in 2014 will no longer go ahead. He also said he is freezing EI premiums paid by workers and employers for the next three years.
“We’re able to do this because of the falling unemployment rate,” Flaherty told reporters during a news conference in Ottawa Monday.
“More people are working. Fewer people are claiming employment insurance benefits and in the result — the employment insurance operating account is on track to return to balance earlier than had been planned.”
But Easter contends the Harper government’s controversial EI eligibility changes are the reason fewer people are claiming EI.
“Less people are using the system, not because they don’t need it, but because they no longer qualify under the changes that have been made,” Easter said in a telephone interview.
The changes specifically targeted frequent users and put greater emphasis on claimants looking for and accepting available work, even if it is up to 30 per cent less than their previous salary and upwards of 100 kilometres from their home.
Documents leaked to media in the spring by a former department employee also suggest EI investigators were ordered to find hundreds of thousands in savings by denying claims and cutting off benefits.
All four Atlantic premiers have said they view the changes as an attack on seasonal workers and industries and have united in calling for a re-examination of the reforms.
Easter acknowledged that cancelling the five per cent hike in EI premiums and freezing them at 2013 rates for three years is good news for employers and workers.
But he said this good news comes as a result of claimants who have been cut off or who have been impacted by eligibility changes — many of whom are seasonal workers in Atlantic Canada.
“The workers, especially in the seasonal industries, are paying a heavy price for the changes under the EI system,” Easter said. “There’s no question in my mind that this premium freeze, if you want to call it that, is coming on the backs of the seasonal workers and the seasonal industries.”
Dan Kelly, president and CEO of the Canadian Federation of Independent Business, lauded the freeze as a positive move, especially for small businesses in Canada.
“This move will keep hundreds of millions of dollars in the pockets of employers and employees which can only be a positive for the Canadian economy,” Kelly said in a news release issued by the federal Finance Department.
“As employers pay 60 per cent of the cost of the EI system, small firms can use these savings to hire, improve wages or help grow their businesses.”
The freeze in premiums means the EI premium rate for employees will remain at the 2013 level of S1.88 per $100 of insurable earnings until 2016, while employers will pay $2.63 per $100.