Mr. Speaker, I would first like to say that I will be sharing my time with the hon. member for Trinity—Spadina.
I am very pleased to take part in this debate on employment insurance. First, if I may, I will read the text of the motion:
That, in the opinion of the House, the Employment Insurance (EI) plan announced by the government on September 11, 2014, and which will begin on January 1, 2015, will not create jobs and growth but will instead provide a financial incentive for employers to lay off workers; and therefore, the House urges the government to re-direct those resources by providing employers an EI premium exemption on newly-created jobs in 2015 and 2016.
I can inform the House that we in the Liberal Party are in favour of this motion. As we know, the government may introduce policy based on facts in the same way it can introduce policy based on populist politics. We might say that the government's response to the situation before us is more a political response.
Let us look at the facts that preceded this announcement from the government. The hiring situation in the country is deplorable. In the last year, Canada's job growth was very weak.
In one year, 81,000 net new jobs were created in the entire country. In the United Kingdom, 775,000 jobs were created while 2.2 million were created in the United States. We can look at this in terms of the growth rate rather than in absolute numbers. These figures represent a growth rate of 2.6% in the United Kingdom,1.5% in the United States and only 0.5% in Canada. During the same year, the private sector in Canada shed 57,000 jobs.
What is the government's response to this disastrous situation? It introduces a measure under which all businesses with a payroll not exceeding $567,000, let us say, will get a maximum $2,200 credit on their premiums, given the maximum exemption is $15,000.
Let me say that again: with a maximum exemption of $15,000, businesses will qualify for a maximum credit of $2,200. This is no job-creation program. A number of economists have said so more than once. I will be quoting them. Specifically, it means that a company paying contributions of around $15,000—$14,700, for example—will qualify for a credit of $2,200. Will that encourage the company to hire people and create jobs? No, because as soon as the company goes over the $15,000 threshold, it no longer qualifies for anything. Absolutely nothing.
As I just said, if the amount of the premiums exceeds $15,000, for example, and the company's premiums add up to $15,150, the companies will not be entitled to any credit. Not a $2,200 credit; no credit. The company will not be motivated to hire anyone, on the contrary. That is the perverse effect of this measure. In fact, the company will have to dismiss or lay off people to get the $2,200 credit. That is not very encouraging for Canada's employment situation.
We have just resumed the session in the House and, like all our colleagues, we were working in our constituency offices.
In my case, I felt like my constituency office became what we call in Quebec a CLD, or local employment centre. My constituents came to see me almost every day, asking me to help them find a job, because the situation is disastrous.
The measure presented today in no way responds to this situation. Furthermore, economists have criticized it so openly that I hope the Conservatives do not attack them because they decided to speak out.
Mike Moffatt, an economist with the Ivey business school at Western University, owns a business of about the same size as the ones we are talking about. In fact, the measure at issue will only prevent small businesses from growing. As soon as a company's payroll exceeds $567,000, it is no longer entitled to any credits. Mike Moffatt said, and I quote:
It is clear that firms under the $15,000 EI threshold have a big incentive to keep wage increases to a minimum. Conversely, firms that are just over the $15,000 EI threshold have an incentive to cut the pay of their staff in order to gain the tax credit.
It goes on. Stephen Gordon, of Université Laval, said that lowering payroll taxes was generally advantageous to everyone and fostered job creation and higher salaries. The Conservatives failed to seize this opportunity when they created another highly targeted tax credit.
The Liberal Party has done its homework and come up with a very clear proposal: providing employers an EI premium exemption for every new job it creates for the following two years. It is a very simple and clear measure. If a business creates a job, it does not have to pay EI premiums for the next two years.
This simple measure will allow businesses to save up to $1,280 for every job created. This will create an estimated 176,000 new jobs. Economists have been evaluating this proposal ever since our leader, the hon. member for Papineau announced it.
Mr. Moffatt said that he hopes the government will take the hon. member for Papineau's suggestion seriously and correct the flaws in its current proposal. The Canadian Federation of Independent Business says it likes the Liberals' plan because it has greater potential for creating new jobs.
That is the measure economists are recommending, employers are asking for, and all Canadians need, not just those in the riding of Bourassa that I represent. That is what they are asking for to create new jobs here.