Since the height of the recession, Canada has created more than 1.1 million net new jobs and continues to be have the strongest job creation records in the G7. A recent report also suggested that Canada is one of the best places to start a business. Today, the Canadian government is backing up this growth trajectory and introduced the Small Business Job Credit, an initiative that aims to “create jobs, growth and long-term prosperity.”
The Small Business Job Credit is expected to save small businesses over $550 million over the next two years and basically lowers small businesses’ Employment Insurance (EI) premiums from the current rate of $1.88 to $1.60 per $100 of insurable earnings in 2015 and 2016. The press release noted that “Any firm that pays employer EI premiums equal to or less than $15,000 in those years will be eligible for the credit. Almost 90% of all EI premium-paying businesses in Canada will receive the credit.”
Joe Oliver, Minister of Finance, said, “Small businesses drive Canadian prosperity, representing about 50% of jobs in the private sector and a third of Canada’s gross domestic product. That is why we are taking action to make small businesses stronger. Our new Small Business Job Credit will lower taxes for business owners and make it easier for them to create jobs for Canadians. Canada has become an economic success story, but the global economy is fragile and there are geopolitical tensions. Therefore, we must continue taking action, as we have today, to create jobs, growth and long-term prosperity.”
For those concerned about additional paperwork need not to worry. The Canada Revenue Agency (CRA) will automatically calculate the credit for you on your business’ return.
