Must-see QP: The tax credit that kills thousands of jobs

Your daily dose of political theatre

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Adrian Wyld/CP
Adrian Wyld/CP

Maclean’s is your home for the daily political theatre that is Question Period. If you’ve never watched, check out our primer. Today, QP runs from 2:15 p.m. until just past 3. We livestream and liveblog all the action.

The must-see moment

Industry groups continue to power the government’s talking points. Yesterday, renewable fuels fed Tory lines on the environment. Today, the voice of small business saved the day on jobs. Nathan Cullen, the NDP finance critic, challenged the government’s economic bona fides. He quoted from the parliamentary budget officer’s latest report, which warned of thousands of lost jobs before the end of 2016 thanks to a tax credit that lowers EI premiums for small business. Cullen ignored the potential job losses and keyed in on a different part of the report (emphasis ours):

An alternative way of presenting the job impact of the measure is in person years. Person years summarizes both the number of jobs created and the duration of employment. PBO’s estimate ofthe impact of the Small Business Job Credit measured in person years would be the sumofthe increase in the level of employment in the first year (200 jobs) and the increase in the level of employment in the second year (800 jobs), or 1,000 person years in total. These jobs are created at an average cost of $550,000 per person year.

$550,000 for a single job? That seems like fair game for a question.

How did Kevin Sorenson, the minister of state for finance, respond? Did he think $550,000 per job is worth it? He didn’t give a hint, instead quoting the Canadian Federation of Independent Business, which applauded the tax credit when it was announced in September. Satisfied, he then took his seat.

The recap

The context

We were talking about a cabinet minister’s talking points being so tired that she had to borrow new lines from a lobbyist. But let’s move on. This morning, the parliamentary budget officer ensured a few moments in question period’s spotlight. Jean-Denis Frechette’s latest report offers New Democrats and Liberals a bread-and-butter criticism of government: that Tories are mishandling employment insurance.

The PBO assessed the impact that the government’s recently announced small-business job credit, a break on EI premiums for small businesses that’s offset by a rate freeze on premiums for other employers, would have on Canadian jobs. The opposition will focus on this excerpt:

“PBO estimates that the Small Business Job Credit will create 200 new full‐time equivalent jobs in 2015 and 600 new jobs in 2016. PBO estimates the premium rate freeze will reduce full‐time equivalent employment by 2,000 jobs in 2015 and a further 8,000 jobs in 2016.”

Do the math and you’ll find the PBO estimating 9,200 fewer jobs by 2016 because of the tax credit. New Democrats and Liberals, who’ve never found Tory EI reform they can support, are thus armed with all the fodder they require.