Employment premiums will be lowered to help businesses cut EI payroll taxes

Finance Minister Joe Oliver makes an announcement in Toronto Thursday, September 11, 2014.

TORONTO - Finance Minister Joe Oliver says employment insurance premiums will be cut, reducing EI payroll taxes by nearly 15 per cent and saving businesses more than $550 million over the next two years.

The rate will be lowered to $1.60 for every $100 earned in 2015 and 2016, down from the current rate of $1.88 in an effort to help stimulate hiring.

Business groups have been calling for a cut, saying that higher premiums have made it more difficult to hire new workers.

Oliver says any business that pays employer EI premiums equal to or less than $15,000 in those years are eligible for the credit, and added nearly 90 per cent of businesses paying the premiums are eligible.

"Our new Small Business Job Credit will lower taxes for business owners and make it easier for them to create jobs for Canadians," he said at a news conference on Thursday at a flooring company in Toronto.

"Canada has become an economic success story, but the global economy is fragile and there are geopolitical tensions. Therefore, we must continue taking action, as we have today, to create jobs, growth and long -term prosperity."