Fact check: Would Trudeau actually 'cut' EI premiums?
Published Tuesday, September 8, 2015 12:33PM EDT
Last Updated Tuesday, September 8, 2015 1:55PM EDT
Liberal Leader Justin Trudeau is proposing an overhaul to the federal Employment Insurance system that would speed up and improve services while changing the current premiums taken out of every worker's pay cheque.
Here's a look at what Trudeau's proposal would mean for Canadians, and how it would change the planned EI rate under the Conservatives' budget.
A less 'aggressive' rate cut
Trudeau is proposing to reduce the amount the government collects in EI premiums off every $100 a person earns, from the current $1.88 to a proposed rate of $1.65.
"We're going to be cutting EI premiums as of Jan. 1, 2017," Trudeau said on Tuesday, at a campaign event in New Brunswick.
But Trudeau's proposed change to the EI premium actually looks like a rate hike, depending on what it's compared to.
If Trudeau's proposed rate is compared to the current one, it's certainly a rate a cut. "People right now pay $1.88 in premiums. On Jan. 1 (2017), we will be reducing them to $1.65," he said.
But that $1.65 is actually a higher rate than the one currently scheduled to take effect on Jan. 1, 2017. The rate is currently scheduled to fall to $1.49 in 2017, as part of the Conservatives' most recent budget. The Liberals are proposing a rate that's 16 cents higher.
Essentially, the Liberals would be reducing the 2017 EI rate from the previous year, but they'd also be increasing the already established rate for 2017.
Trudeau refused to characterize it as a tax hike, saying instead that the Liberals are "still reducing our premiums, just not cutting them as aggressively."
But Dan Kelly, president of the Canadian Federation of Independent Business, was quick to call it just that.
"Payroll taxes are the #1 most harmful form of taxation on job creation," Kelly told CTV News' Richard Madan in an email statement. "Increasing dollars dedicated for training could be helpful, but making it easier to get on or stay on benefits would make the shortage of labour even worse."
The CFIB estimates a Trudeau government would collect an additional $2.15 billion under his proposed EI rate, with 60 per cent of the money coming from employers.
'We are reducing premiums and increasing benefits'
Trudeau said his proposed EI premium rate would make an additional $2 billion available to spend on improving the EI system and accelerating services.
Trudeau promised $500 million per year to improve skills training at the provincial level, and vowed to reduce the waiting period for unemployed individuals to receive their first payment, from two weeks to one. He also pledged to scrap an all-encompassing rule that required new workers and those re-entering the workforce to put in at least 910 hours of work before becoming eligible for EI. Trudeau says the hourly requirements would be set at a regional basis.
In addition, the Liberals are promising to introduce more flexible parental leave and compassionate care benefits.
Trudeau also vowed the extra $2 billion would not be used to help balance the federal budget – something the Liberals' Jean Chretien did when he was prime minister.