Thank you very much.
I will refer to the slides that I believe you have in front of you, so I'll keep the numbers going.
Just for those who don't know, CFIB is a small business advocacy organization. We have 109,000 members across Canada, all of them are independently owned and operated businesses. We're a strictly non-partisan advocacy group.
Slide 3 shows that the small business expectations for the economy are dropping pretty fast. In fact, in Alberta right now we have an unprecedented low in small business optimism. That is quite troubling. Slide 4 tells us that on the employment front, small employers have been holding it reasonably well to this point. There have been more small employers looking to hire than looking to lay off. In recent months, as we've been measuring it, that gap is getting really small, where we were near a larger number of employers looking to lay off than hire. But in the most recent months, there's actually been a nice uptick it seems in terms of hiring expectations. This is often very seasonal. We do see this reading fairly frequently at this time of the year, but one would expect with the economy being as flat as it is right now, small firms, which do a disproportionate amount of the hiring in the economy, may continue to struggle with that in the future.
Slide 5 shows that the tax burden remains the number one concern of small and medium-sized firms across the country, but employment insurance is still fairly high. About 46% of our members say that EI is an issue of concern to them.
Payroll taxes hit small firms disproportionately hard. Slide 6 shows that 76% of members, small business owners, say that payroll taxes, EI, CPP, workers' compensation, those types of taxes, are the ones that hit them the hardest, well above corporate income tax, personal income tax, or even sales taxes.
One thing I should point out on slide 7 is that a huge number of small businesses across Canada have been asked by employees to lay them off so the employee can collect employment insurance premiums. While employers support strongly the view that there should be a good, well-funded system of EI available for those who lose a job through no fault of their own, we do need to do more to ensure that it doesn't encourage people to go and sit on the sidelines of the labour market as opposed to being actively employed.
With respect to the 2012 changes, we did survey our members in three regions: Atlantic Canada, Quebec, and Ontario. On slide 8 it shows that there was fairly broad support for most of the changes that were brought in at the time. That was including employers in Atlantic Canada and Quebec as well.
But we did certainly get some negative feedback from small businesses that are seasonal in nature. We did a deep dive as to what their issues and challenges were. There was concern at the time that they might lose good people who they depend on year after year. I have to say though, in reality—and I think this was consistent with what Colin was sharing a minute ago—virtually nobody got rejected from the employment insurance system as a result of these changes.
Enforcement has always been a problem. Most employees know that if you have a good story when you go into the EI office, you'll get reinstated with benefits in about two seconds. That does suggest to most employers that the enforcement really showed that these changes weren't having an operational impact on their employees or prospective employees.
I do want to note that small firms invest very heavily in training. We've estimated that at about $14 billion a year from SMEs. Most of that training in the small business workplace is informal. Small firms do find it more costly to hire new entrants into the economy, about $4,200 per year. It costs a lot more when you hire somebody who doesn't have job experience than somebody who comes with some.
We also know that small firms are the largest source of employment for inexperienced workers. I got my start at a pizza restaurant in Winnipeg where I grew up, and many of you will say the same thing, that your first job was often at a small independent business. That's very costly to the business. Small firms take a huge chunk of that employment burden in terms of training.
I do want to note very strongly with you that the Liberal promise to reduce the size of the cut in EI premiums in 2017 does worry us, particularly our small firms. Many of you may not know that in 2017 EI rates for small firms will go up while rates for employees and larger firms will go down. That is a huge concern. That's as a result of the small business job credit that was brought in for 2015 and 2016. That credit lowered premiums for small firms a couple of years earlier than other groups, but now as a result, small firm employers are going to see payroll taxes go up in 2017 unless action is taken, something we're advising you to do.