Small Businesses Seek a Better EI System

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“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. “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.”

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. As Parliament continues its review of the EI Program, CFIB is appearing today at the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities to urge policy makers to consider the needs of small employers, particularly as they struggle to stay afloat during the pandemic.

Eighty-four per cent of small business owners want to see EI premiums split 50:50 between employers and employees. Nine in 10 small businesses (91 per cent) 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 per cent) and introducing an EI rebate for training (67 per cent) and incentives to hire young workers (68 per cent).

“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.

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 per cent) 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.”

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 95,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.