Canadian Manufacturing

Small businesses want a fairer EI system, not higher premiums: CFIB

84% of small business owners want to see EI premiums split 50:50 between employers and employees

April 15, 2021  by CM Staff

Reasonable precaution standards are beginning to emerge in the return to work process following COVID-19 lockdowns. (Chansom Pantip/Adobe Stock)

OTTAWA — Any move to make the Employment Insurance (EI) system fairer would see significant support from small business owners, says a new report by the Canadian Federation of Independent Business (CFIB) titled Focusing on Fairness: Small Business Perspective on Reforming the EI System.

“Many small businesses are facing significant financial and cash flow issues due to the ongoing pandemic,” said Corinne Pohlmann, CFIB’s senior vice-president of national affairs in a prepared statement. “As the government prepares to release the budget next week, business owners are worried that funding any new programs, or making the EI system more generous, will add significant costs in the form of EI premium increases, especially as they continue to pay 1.4 times the employee rate.”

84% of small business owners want to see EI premiums split 50:50 between employers and employees. Nine in 10 small businesses (91%) would also welcome measures such as refunding EI over-contributions, which currently are added to the EI account instead of being returned to them on their annual tax return as is the case for employees. Small business owners are also supportive of making Job Bank registration mandatory to receive regular EI benefits (78%) and introducing an EI rebate for training (67%) and incentives to hire young workers (68%).

“Small business owners are supportive of funding special benefits through EI, such as maternity and sick leave, but the vast majority see the EI system as primarily a job-loss insurance program, meaning the end goal should be getting workers back into the workplace. Reuniting employers and employees will be a key part of post-COVID economic recovery,” added Pohlmann.

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CFIB is also cautioning the government against making any significant and costly changes to EI before the economy recovers. However, if it moves forward with reforms, nearly nine in 10 small businesses (86%) want the government to conduct a full consultation with workers and employers, as well as a detailed cost analysis before moving ahead with any changes.

“Unlike other government programs, EI is paid for entirely by employers and employees,” said Senior Policy Analyst, Emilie Hayes. “This means that the government should not be making any changes unilaterally without a thorough consultation with those who are footing the bill.”