Canadian Finance Minister Jim Flaherty said his government will freeze employment insurance premiums for three years to boost employment.
The measure will cost C$660 million ($636 million) in 2014 and won’t have an impact on the nation’s ability to balance its books by 2015 because premiums have been increasing more quickly than budgeted, Flaherty told reporters today in Ottawa.
“There is no fiscal impact,” Flaherty said. “It’s very important for businesses, especially smaller businesses, to have less overhead.”
Canada’s labor market is on pace for the slowest growth since 2001 outside of the last recession. Job gains have averaged 12,700 this year, less than half of the 25,900 created in 2012, as manufacturers and governments cut payrolls.
The employment insurance rate for employees will remain at C$1.88 per C$100 of insurable earnings in 2014 and won’t exceed that amount in 2015 and 2016, the finance department said in a statement.
The government had budgeted for a rate of C$1.98 in 2015 and C$1.93 in 2016, the finance department said in a background document also released today.