Flaherty denies EI funds linked to surplus
Watchdog claims high premiums needed to beef up budget in 2015
MARKHAM, ONT. — Finance Minister Jim Flaherty is denying a federal watchdog analysis that says he’s using high EI premiums to beef up his expected budget surplus in 2015.
“We do not take EI funds and use them to balance the budget. That’s what the Liberals did,” Flaherty said Friday during a media conference in Markham, outside of Toronto, where he was holding pre-budget consultations with academics, business and community leaders.
“We have stabilized and frozen the EI rates.”
A Parliamentary Budget Office report released Thursday said the Conservatives may need to depend on artificially high EI premiums, asset sales and spending restraint to balance the budget by the 2015 election.
Flaherty said that simply is not the case. “That is a matter of some confusion by the new parliamentary officer,” he said.
The PBO estimated the EI fund will have a $1.8-billion surplus in 2015, which represents almost half the surplus the government anticipates for the 2015-16 fiscal year.
The PBO said Thursday that EI premiums should normally start coming down in 2015 when the employment insurance fund flips to a surplus from a deficit.
A big chunk of the surplus hinges on extraordinary measures and keeping payroll taxes higher than they need to be, the report said.
Flaherty has said he intends to keep EI premiums frozen until 2016.
The finance minister also addressed the dominance of the Canada Mortgage and Housing Corp., saying he wouldn’t hesitate to again implement more stringent rules on the agency.
“We’ve tightened the mortgage insurance rules four times in my time as finance minister, and if we had to do it again, we’d do it again,” he said. “Regrettably CMHC became something more grand, I think, than it was intended to be.”
Flaherty has questioned whether the government should be in the business of insuring higher-risk mortgages at all. The CMHC was founded in 1946 to help war veterans buy homes during a housing shortage.