The Harper government's plan to erase the deficit now has a hole approaching $5-billion after Finance Minister Jim Flaherty announced that Ottawa will not raise Employment Insurance premiums as high as originally budgeted.

The move was welcomed by business groups, the Canadian Labour Congress and Bank of Canada governor Mark Carney, who said the measure will help create jobs. With the Canadian economy showing signs of slowing down, the government said it is listening to widespread warnings that a steep increase in payroll taxes would cost jobs.

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