Tom Mulcair promises to freeze EI premiums, boost benefits
Harper puts cuts to EI premiums at centre of Tory plan to create 1.3 million jobs by 2020
Tom Mulcair chose a different path from his two main rivals this morning, announcing that an NDP government would freeze employment insurance premiums for the next four years rather than cutting them as his Liberal and Conservative counterparts have promised.
The announcement comes as Conservative Leader Stephen Harper puts his party's plan to reduce EI premiums by 20 per cent at the centre of a campaign commitment to create up to 1.3 million net new jobs by 2020.
The cut, Harper said during a campaign stop in Winnipeg, would encourage small businesses to expand and hire new employees.
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Mulcair made his promise to freeze premiums in New Brunswick, a province that registered the highest youth unemployment rate in the country last year.
Freezing the premium at its current rate would generate billions in revenue that would otherwise be lost if the NDP's political rivals form government — money that Mulcair said will be used only to fund programs aimed at boosting employment and expanding training.
A New Democratic government would also extend the leave of the second parent of a newborn child by five weeks, Mulcair said.
The proportion of unemployed Canadians who qualify for EI payments has fallen steadily, from around 80 per cent in 1990 to less than 40 per cent today — a decline that Mulcair attributed to increasing restrictions placed on eligibility requirements by successive Liberal and Conservative governments.
Those most likely to be denied benefits tend to be in the most precarious and poorly paid jobs, often in the service industry. That in turn leads to regional disparity in eligibility rates. In Toronto, for example, only 26 per cent of those who lose their jobs receive any EI benefits.
Speaking at a campaign event in downtown Montreal, Liberal Leader Justin Trudeau said the NDP's plan falls short of what Canadians expect.
"Mulcair announced today he is going to maintain EI premiums at the high level that Mr. Harper brought them to," Trudeau said of Mulcair's plan.
"We feel that a plan to make EI respond better to the needs of Canadians while still reducing premiums is what Canadians expect from their employment insurance program."
Liberals, Tories 'raided' EI fund, Mulcair says
During the event, the NDP leader accused his political rivals of treating the EI fund as a "piggy bank" to be "raided" when extra cash is needed to balance federal budgets. The Liberals under former prime ministers Jean Chrétien and Paul Martin used billion-dollar surpluses not only to balance the books, but to repay debt, cut taxes and fund unrelated programs.
Conservative candidate and finance minister Joe Oliver used a $2.7-billion surplus, generated after the EI fund dipped into deficit following the 2008 financial crisis, to balance the government's last budget.
Mulcair said his party would put an end to the practice, pledging that an NDP government would remove the EI fund from general revenues and create an independent board to act as stewards, preventing the government from dipping into it.
"Liberals and Conservatives raided the EI fund to the tune of $50 billion and we'll make sure that fund is protected," he said.
To cut, or not to cut?
Both the Conservatives and Liberals have promised to cut EI premiums from the current rate of $1.88 per $100 earned.
The Tories' plan would reduce the rate to $1.49 per $100 earned.
The cut is the centrepiece of Harper's commitment to create up to 1.3 million net new jobs by 2020. In conjunction with a number of tax initiatives, such as the home renovation tax credit, the reduction in EI premiums would help create jobs at a rate slightly faster than the past five years, Harper said.
"We've consulted experts on whether this is reasonable," Harper said.
"Obviously, when we're talking 1.3 million more jobs, look, I would say there's no reason why we can't have a similar record on that than we have now."
The jobs created since the recession are 90 per cent full-time, more than 80 per cent of them are in the private sector and are "by and large" in high-wage industries, Harper said.
"I see no reason why we could not replicate that number going forward," he said.
He also repeated his previous criticism that measures the NDP and Liberals have promised, such as boosting the Canada Pension Plan and expanding EI benefits, would force businesses to cut jobs or shut down altogether.
The difference between the Grits and NDP, though, is that the Liberals have committed to increasing EI benefits while slashing the premium to $1.65 per $100 earned.
After Trudeau made his initial EI announcement earlier this month, the Tories attacked the plan as a payroll tax hike that would inevitably stifle the growth of small businesses. The Canadian Federation of Independent Business, which has consulted with the government on EI reform, echoed that criticism.
This morning, CFIB president Dan Kelly levied a similar attack on Mulcair's proposed plan, saying it would mean a tax hike on small businesses. It will also hurt young people looking for work, Kelly said.
Mulcair, however, insisted that maintaining the current premium does not amount to any kind of a tax hike.
"We will not be raising any of those payroll taxes. They will be staying exactly where they are," he said.
Maintaining EI premiums at current levels means a big tax hike on small biz. Will hurt youth looking for work.—@CFIB
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With files from CBC's Evan Dyer and The Canadian Press