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Budget to give small business a leg up in creating jobs

Federal Finance Minister Jim Flaherty tries on his budget shoes at a store in Ottawa on Wednesday.

Chris Wattie/Reuters

Stephen Harper's new federal budget will offer small businesses a carrot to hire additional employees, a job creation measure worth more than $200-million.

Canada's unemployment rate dropped to 7.4 per cent in February but only because 38,000 Canadians gave up looking for work. The pre-recession low was 5.9 per cent.

Sources say the March 29 federal budget will extend by another year a temporary hiring credit for small- and medium-sized business that will defray their cost of employing more people.

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The Harper government is looking to brand the new 2012-13 budget as an exercise in long-term employment creation rather than an austerity effort that will balance the books.

The measure will provide a credit of up to $1,000 against the increased employment insurance premiums a small firm would have to pay as a result of hiring new staff.

The credit means a firm could take on two or three new employees without incurring additional EI costs.

Ottawa estimated this break would cost $165-million when it enacted it as part of the 2011-12 budget.

It's expected the cost for the 2012-13 budget, to be tabled Thursday, would be more than $200-million.

About 525,000 small- and medium-sized employers will be eligible to apply for the credit.

Extending the temporary EI Hiring Credit for Small Business was the top request made of Ottawa by the Canadian Federation of Independent Business.

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About the Authors
Parliamentary reporter

Steven Chase has covered federal politics in Ottawa for The Globe since mid-2001, arriving there a few months before 9/11. He previously worked in the paper's Vancouver and Calgary bureaus. Prior to that, he reported on Alberta politics for the Calgary Herald and the Calgary Sun, and on national issues for Alberta Report. More

Parliamentary reporter

A member of the Parliamentary Press Gallery since 1999, Bill Curry worked for The Hill Times and the National Post prior to joining The Globe in Feb. 2005. Originally from North Bay, Ont., Bill reports on a wide range of topics on Parliament Hill, with a focus on finance. More

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