Why won't the government release analysis of the small business job credit? - Macleans.ca
 

Why won’t the government release analysis of the small business job credit?

If the government did its own calculations, it’s not showing or telling


 

Since the government announced the policy in September, the “small business hiring credit” has been questioned and criticized. Stephen Gordon wrote that the Conservatives had chosen a policy “that is complicated and most likely to have little effect on employment or wages.” Mike Moffatt concluded that the credit had “major structural flaws that, in many cases, give firms an incentive to fire workers and cut salaries.” The Parliamentary Budget Officer (PBO) estimated that it would create only 800 jobs.

But, for all that, the Finance minister continues to defer to the analysis of an industry association and lobby group to defend the government’s proposal. And if the government has conducted its own analysis of its proposal, it refuses to release those calculations.

“The CFIB says that the credit will create 25,000 person-years of employment,” Joe Oliver said last week.

Oliver and various Conservatives have been quoting this figure since the House reconvened in September (a few times, Oliver has referred to “25,000 jobs,” which would only be accurate if the minister believes the credit is going to create 25,000 one-year jobs). The CFIB is the Canadian Federation of Independent Business. When Oliver announced the new measure, the CFIB celebrated the move and offered that estimate. The CFIB has since posted a longer analysis here.

A month ago, when the PBO released its analysis of the hiring credit, I asked the Finance minister’s office if the government had “any analysis of its own” to counter the PBO’s calculations. I was directed to the CFIB’s study.

Last week, after hearing the Finance minister again cite the CFIB, I followed up with more questions: Did Finance Canada study the impact of the small-business hiring credit before the minister announced that measure? Has Finance Canada conducted a study at any point? If so, can I have a copy of that report?

On these questions, I was directed to the Finance department, which sent along the following four paragraphs:

The Small Business Job Credit will fuel growth and job creation. It is expected to save small employers more than $550 million over 2015 and 2016. This is real money that a small business can use to help defray the costs of hiring new workers and to take advantage of emerging economic opportunities.

The Canadian Federation of Independent Business estimates that the Small Business Job Credit will create 25,000 person-years of employment over the next few years.

About 780,000 businesses in Canada are expected to benefit from the Small Business Job Credit in 2015, representing over 90 per cent of EI [Employment Insurance]-premium paying businesses.

Beginning in 2017, premiums will be set according to a seven-year break-even rate, ensuring that EI premiums are no higher than needed to pay for the program over time.

As this did not address my question, I asked, somewhat rhetorically, whether I could thus conclude that the government did no analysis of the small-business job credit before proposing it. That question received no response.

NDP Finance Critic Nathan Cullen tells me that, during a briefing for MPs last week on the latest budget implementation bill, the NDP asked government officials about their analysis of the impact of the hiring credit, but that Finance department officials pointed to the CFIB’s analysis. Cullen says he asked if the officials had done an independent assessment and was told that, if such an analysis had been done, it  an analysis had been done, but would be it was considered advice to the minister*.

Documents containing advice to a minister can be exempted from disclosure through the Access to Information Act—in theory, so that civil servants can provide full and frank advice to ministers. But applying that to government analysis of a government proposal currently before the House of Commons would seem to absolve the government of having to justify its own proposals.

“There’s no reason to make it confidential,” Cullen says. “Zero.”

*Cullen later contacted me to say that, upon further reflection, he believes it was stated that an analysis did exist.


 

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