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.
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.