EI system under fire

<p>Canada’s employment insurance “surplus” stands at $54 billion — and it remains well out of the reach of many unemployed Canadians.</p>


Group to recommend management changes in Ottawa today

Canada’s employment insurance “surplus” stands at $54 billion — and it remains well out of the reach of many unemployed Canadians.


Critics say the program’s “draconian” eligibility rules are responsible for people slipping through the cracks into poverty while the federal government uses the money to finance tax cuts to corporations, and other things.


“For people who are paying into that insurance, it’s not working for them ... (I)n the next economic downturn that we see, many of those people will not have support from EI to cushion them,” said Frances Lankin, president and chief executive officer of the United Way of Greater Toronto.


The surplus generated by the employment insurance program doesn’t actually exist as a separate entity. The difference between what is collected in EI premiums and what is paid out is counted as general revenue, and the bulk of it is used to fund other programs or to pay down the national debt.

“This is a tax. It’s not an insurance premium anymore because they are collecting a billion dollars a year more than they need and it is going to general revenues,” said Garth Whyte, executive vice-president of the Canadian Federation of Independent Business.

The Canadian Institute of Actuaries is to present a report today in Ottawa stating the current system is not working and recommending that an independent body be set up to manage the EI fund, similar to the one that manages the Canada Pension Plan.

Both employees and employers pay into the fund — 40 and 60 per cent respectively.

Premiums have gone down slightly each year for the past several years but, even so, the surplus keeps growing.

The major complaint is that the number of hours required for eligibility puts the program out of reach for many unemployed people, especially part-time or seasonal workers.

70% out of luck

  • According to the Ontario government, 70 per cent of the province’s unemployed workers do not qualify for employment insurance benefits and are therefore excluded from EI-funded training programs.

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