TORONTO/OTTAWA (Reuters) - Canadian small businesses will get C$550 million ($500 million) in rebates on their employment insurance premiums over the next two years in order to boost hiring, Finance Minister Joe Oliver said on Thursday.

Motorized mannequins hold signs that read "Hire Me" in Toronto May 23, 2014. REUTERS/Mark Blinch

The Small Business Job Credit will effectively lower small businesses’ employment insurance premiums to $1.60 per $100 of insurable earnings as of Jan. 1 from the current legislated rate of $1.88, or about a 15 percent cut.

Canadian Federation of Independent Business President Dan Kelly, speaking next to Oliver, said he estimated this would create 25,000 person years of employment over the next couple of years.

“This is big, big news,” he said.

Speaking at a flooring company in Toronto, Oliver also promised “a substantial reduction” in the overall legislated employment insurance rate in 2017 to a level that will enable the fund to break even.

The rebate for small businesses, which will apply to almost 90 percent of businesses which pay employment insurance premiums, will be applied at the time they file their taxes.

Canada’s employment insurance program provides some income to workers who qualify after losing their jobs. It is financed through premiums charged to workers and employers.

The finance minister reiterated that he would be cutting taxes next year once the budget is balanced.

The Conservative government, which relied on large budget deficits to help Canada avoid the worst of the recession, has projected it will have a surplus of C$6.4 billion ($5.81 billion) in the 2015/16 fiscal year.

The next federal budget is due in the first three months of 2015. The Conservatives have cut taxes several times since they took power in early 2006.