Justin Trudeau promises sweeping reforms to employment insurance system
Liberal leader says plan would generate $2B per year of revenue for the federal government
The federal Liberals are promising cuts to employment insurance premiums, but those cuts won't go as deep as reductions already promised by the Conservatives.
Liberal Leader Justin Trudeau is campaigning in Atlantic Canada today, where changes to employment insurance and their impact on seasonal workers have become an election issue.
The Liberals say if they form a government after the Oct. 19 election, they would reduce EI premiums from $1.88 per $100 earned to $1.65 starting in 2017.
In their 2015 budget, the Conservatives projected premiums would fall to $1.49 by 2017. Liberals say their plan would result in an extra $2 billion per year in revenue for the government, though Trudeau said this does not amount to a tax hike in disguise.
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"We will also be investing in the program with the money people are paying in, so that they have better benefits," the Liberal leader said at a campaign stop in Bouctouche, N.B.
"Our plan is completely balanced and we will be able to do everything we're announcing today while at the same time cutting EI premiums for workers across the country."
The Liberals are also pledging to reduce the waiting time for people who apply for EI from two weeks to one week and to scrap a rule that requires anyone entering the workforce for the first time or re-entering after an absence of at least two years to work a minimum of 910 hours before they are eligible for EI. Instead, the threshold would be set regionally.
Trudeau promised to repeal EI reforms brought in by the Conservatives, which critics have said make it more difficult for unemployed workers to claim benefits. He also pledged an extra $500 million per year for skills training.
All the changes would come into effect in the 2017 calendar year and would cost about $1.75 billion, not including the $2 billion the Liberals plan to reinvest, Trudeau said.
Changes mean hike in payroll taxes: Tories
Trudeau, however, wavered when asked whether he would commit to not using the EI fund to balance the federal budget, a move the Conservatives and past Liberal governments have used when the fund was in surplus.
At a rally Tuesday evening in St Catharines, Ont., Conservative Leader Stephen Harper took a shot at the Liberal plan for EI, describing it to the audience as a cash grab.
Harper said the Conservatives increased the rates to deal with the economic downturn, but said the rates were now in a position to drop dramatically. He mocked Trudeau's plans for a smaller decrease.
"The Liberals are now saying 'Hold on. You can't drop those rates. We want to spend it on things,'" Harper told supporters.
"Friends, you get us, those rates will come down and we'll say to the Liberals: 'Hands off our EI premiums!' "
The crowd applauded and a few members eagerly chanted "Hands off! Hands off!"
Conservative campaign spokesman Stephen Lecce says it follows another Liberal CPP payroll tax hike on middle-class Canadians that would cost workers earning $60,000 over $1,000 in take-home pay.
Lecce also pointed to a study by the Canadian Federation of Independent Business (CFIB) — an organization that has consulted with the federal government on changes to the EI system — that said increases to CPP and EI premiums could force small businesses to cut back workers' wages and possibly lead to job losses.
CFIB president Dan Kelly said on Twitter that Trudeau's proposal "is a recipe for higher unemployment, particularly for young people," adding that EI and CPP costs are the "most harmful form of taxation on job creation."
Increasing EI taxes by $2.15B/year in a flat economy is a recipe for higher unemployment, particularly for young people. <a href="https://twitter.com/hashtag/SMEelxnwatch?src=hash">#SMEelxnwatch</a>—@CFIB
Payroll taxes (EI/CPP) are the #1 most harmful form of taxation on job creation according to small business. <a href="https://twitter.com/hashtag/SMEelxnwatch?src=hash">#SMEelxnwatch</a>—@CFIB
Value of seasonal work
The spot the Liberals chose to make their announcement has the worst unemployment rate of the three economic zones in New Brunswick. Data compiled by Employment and Social Development Canada shows the region's unemployment rate is 16 per cent.
The Liberals are hoping the promise of improved EI benefits boosts their electoral chances in a province where they only hold one seat and the Tories have eight.
The province's Liberal premier said the 2012 changes prompted many New Brunswickers to head west for work, believing they couldn't make a living in Atlantic Canada.
Brian Gallant said the changes also hurt his government's bottom line.
"I think it makes sense to reverse them," Gallant said Tuesday of the Conservative changes to EI.
Gallant said he didn't think the diminished cut to premiums that Trudeau is promising would hurt small businesses who have long argued that higher rates hurt their ability to grow.
Trudeau's plan won praise later in the day at another campaign event at a fishing wharf in the town of Neguac, N.B.
Rheal Savoie, who fishes for lobster and herring, says seasonal workers will welcome the help Trudeau and the Liberals are offering.
"People need it. There's nothing down here," he said.
With files from Catherine Cullen, Tom Parry and The Canadian Press