EI Account shorted $13 billion
The Employment Insurance Account ended the 2007-2008 fiscal year with a $56,952,606,000 (billion) surplus.
$2 billion was established ‘as a contingency fund that will support relative premium rate stability’. When a new system became law, ‘a contingency reserve of $10-$15 billion’ called for by the Canadian Institute of Actuaries but not enacted.
Minister of Human Resources and Skills Development Diane Finley said Liberal leader Michael Ignatieff’s plan for employment insurance is “irresponsible because it would only result in huge increases in payroll taxes,” and “they have worked hard to get EI benefits to this point and will continue to do whatever they can.”
She added “That payroll tax increase would kill jobs and small business.”
There will be an increase in EI spending this year. Had Flaherty and Finley followed advice given them by the former Chief Actuary of the EI program, by the Auditor-General of Canada and by the Canadian Institute of Actuaries, there would have been an adequate contingency fund set aside for recession rather than threats of job threatening tax increases.
The Supreme Court of Canada ruled the government could do what it willed with the E.I. payroll taxes paid by both employees and employers. It is unfortunate, now that the recession has struck, they were, for whatever reasons they had, $8-13 billion short in planning for the inevitable.
Joe Hueglin, Niagara Falls, Ontario