OTTAWA – A notable Liberal election pledge designed to encourage employers to hire young people failed to make the cut in last week’s federal budget.
Prime Minister Justin Trudeau vowed during last year’s campaign to offer a 12-month holiday on employment insurance premiums to employers who give permanent jobs to people aged 18-24.
The promise, announced in September by Trudeau himself, was supposed to come into force this year and extend through 2017 and 2018 _ but it didn’t receive a mention in the budget.
During the campaign, Trudeau noted that the Chretien Liberals did something similar in the late 1990s “to tremendously positive effect.”
“We saw the number of young people’s jobs spike during those years,” Trudeau said during a campaign stop in Burnaby, B.C.
“That’s exactly what we need right now, given the extremely high unemployment rates for youth.”
Last month, the country’s unemployment rate for youth aged 15 to 24 was 13.3 per cent, compared to an overall jobless rate of 7.3 per cent.
Trudeau`s promise would have also provided financial relief for potential bosses by waiving the EI contributions.
The Liberals estimated employers would have saved $80 million this year, $80 million in 2017 and $60 million in 2018.
Dan Kelly, president and CEO of the Canadian Federation of Independent Business, said Tuesday his membership was very supportive of the promise of EI relief.
“That was one thing that business owners really liked,” said Kelly, who was also deeply disappointed the Liberals “deferred” another of their pledges to continue reducing the small business tax rate beyond 2016.
“That was the second element of their platform that we applauded and they scrapped that, too.”
Federation members liked the previous edition of the EI-holiday program in the 1990s, Kelly added.
“Not only was that a promise to small-business owners … but it was a promise to young people,” he said.
Trudeau, who participated Tuesday in a roundtable on employment insurance in Calgary, had presented the commitment during the election campaign as a component of the party’s broader youth job strategy.
During the campaign, the Liberals had estimated their overall youth job strategy would $455 million in both 2016-17 and 2017-18; $435 million in 2018-19; and $125 million in 2019-20.
But last week, the Liberal budget earmarked $165.4 million in new funding for youth employment in 2016-2017. The budget said that investment was on top of $339 million already announced, over three years, for the federal summer jobs program.
The government pledged to provide more cash in the coming years for youth employment, with particular emphasis on boosting job opportunities for the most-vulnerable young people.
It also announced it will further explore, and eventually enhance, its youth employment strategy by seeking input from a panel of experts and a council of Canadians aged 16 to 24.
Later Tuesday, Finance Minister Bill Morneau pointed to some of these items from his budget when he was asked about the absence of the EI-related youth employment policy. He also noted that the budget contained significant changes that will increase student grants.
“We look at those measures as being important,” Morneau told reporters in St-Valentin, Que.
He was also asked if the decision to omit the EI-related measure was a permanent move.
“We’ll be announcing more once we come back with that strategy.”