Ottawa plans to lean on changes to the Employment Insurance system to help Canadians cope with a job market that remains tough in several sectors. The government most notably expects manufacturing job losses to keep mounting, albeit at a slower pace, due to weak U.S. demand and the rise of the Canadian dollar. So in addition to previously announced reforms that extended the length of time unemployed Canadians could remain on EI by five weeks, the government is now expanding its work-sharing program, at a projected cost of $106 million over the next two years.
Under the work-sharing program, employees whose workweeks have been cut are entitled to collect EI payments to make up the shortfall in income. Thursday’s budget extends the amount of time individuals can take part in the program to 78 weeks from the previous maximum of 52 weeks. The move is a temporary one, though, and will be eliminated on March 31, 2011. The government estimates its combined EI-related measures will create or maintain 24,000 jobs by then end of 2010, at a cost of $2.7 billion over two years.
Thursday’s budget will also facilitate access to EI for workers who take a leave of absence from work after losing a family member as a result of a crime. The cost of the program is pegged at $6.6 million over two years.
Investments targeted at youth job creation include a one-time contribution of $10 million to the Canadian Youth Business Foundation aimed at young entrepreneurs, and $30 million to encourage businesses to hire recent college and university graduates. At-risk youth will benefit from an extra $30-million committed to skills development programs.
Meanwhile, single parents of children under six can expect to see their tax bill cut thanks to changes in the way $100 per month Universal Child Care Benefit is taxed. Under the current system, the benefit is added to a single parent’s income and taxed at their marginal tax rate, meaning single-income two-parent families, who are allowed to add the benefit to a non-working parent’s income, may pay less tax than their single-parent counterparts on identical UCCB payments. Ottawa now plans to allow single parents to add the income from the UCCB to that of their child, effectively eliminating the tax on UCCB. The change is expected to cost the government $5 million a year.
After much public deliberation over the value of Canada’s Own the Podium Olympic program during the Vancouver Games, the federal government has announced it will top up funding for elite athletes by $44 million over two years. The new funding is part of an overall boost to federal sports programs, such ParticipACTION and the Paralympics and Special Olympics, worth $62 million over two years.
While increases to benefits for families, youth and the unemployed are meager, they appear to be safe from the government chopping block. The budget includes an unequivocal pledge not to cut them in the future. The federal deficit fighting plan, the budget documents promise, will include no cuts to “major transfers to persons” nor will it feature cuts to transfers to other levels of government.