‘EI will be managed on a truly break-even basis’

By Aaron Wherry - Thursday, January 19, 2012 at 1:17 PM - 0 Comments

Greg Weston questions the existence of the Canada Employment Insurance Financing Board.

But in all three years the board has been in existence, the Harper government has simply capped EI rates to spare Canadian workers from potentially huge premium increases. As a result, the rate-setting agency has yet to set a single rate.

The board’s other main responsibility is to invest any surplus EI funds. That has never happened, either. Since the government started capping EI contribution rates, the employment insurance program has been running a deficit now totalling almost $9 billion.

The NDP is unimpressed. For the record, here is how Jim Flaherty explained the CEIFB in announcing its creation. Continue…

Not in service (II)

By Aaron Wherry - Thursday, November 10, 2011 at 5:17 PM - 0 Comments

In response to this post, the office of Human Resources Minister Diane Finley sends along the following.

As announced in August, Service Canada will improve the way in which EI claims are processed by introducing further automation to an increasingly outdated and paper-based system. This will happen over the next three years. With continuous improvements to the way that we do business – such as increased automation, improved online services, and a nationally-managed approach to the distribution of workloads – Service Canada is positioned to manage service demands in a more cost-effective way. Modernizing our services will mean changes to the way we currently do business but ultimately will allow for better services for Canadians.

Canadians expect their hard-earned tax dollars to be used as effectively and efficiently as possible. The government of Canada is working hard, on behalf of Canadians, towards eliminating the deficit, returning to balanced budgets and improving the services we deliver. Over the course of the year, and dependent on labour market conditions and other factors, there may be fluctuations in the volume of Employment Insurance (EI) applications which could affect the speed of pay from one week to the next. We continue to carefully monitor the number of claims to make sure that we provide the best possible service to Canadians who are in need of benefits.

‘The trouble with the populist narrative’

By Aaron Wherry - Wednesday, November 9, 2011 at 1:28 PM - 0 Comments

Bob Rae appeals to economics.

A premium is a tax, and payroll taxes discourage hiring. Make no mistake, payments to people who have no work is essential, and a hallmark of a decent society and an effective automatic stabilizer for the economy. But how we pay for them should be the subject of a serious debate. The Liberal Party is calling today for a freeze on employment insurance premiums, and a review of the tax into the future. The payroll tax increases planned by the Conservatives will put a new tax burden of 1.2 billion on businesses and workers just as the economy is slowing down. It is a very bad idea, and the Conservatives should change course.

We need to go further and address the income tax code itself. Like their other favourite statute, the Criminal Code, the Conservatives cannot resist tinkering with endless boutique tax credits and changes that respond to the flavour of the month politics that is now the hallmark of the political right. These credits are rarely refundable, which means that those who really need help don’t get it. Out of the roughly 25 million tax filers in Canada, eight million do not have enough income to pay taxes. Those are the people who need these tax credits the most and they are the ones who don’t even get to apply.

An answer, of sorts

By Aaron Wherry - Tuesday, November 8, 2011 at 12:37 PM - 0 Comments

The Liberals have persisted these last several weeks in asking the government side to cancel an increase in EI premiums scheduled for next year. The government side has persisted in ignoring these questions.

Today though, the Finance Minister will apparently announce that the planned increase will be halved.

Ottawa to scale back EI premium increase

By macleans.ca - Tuesday, November 8, 2011 at 12:17 PM - 0 Comments

The federal government is resizing an increase of employment insurance premiums scheduled to take effect on Jan. 1, 2012, reflecting mounting concern in Ottawa about rising unemployment. Under the government’s original plan, announced last fall by Finance Minister Jim Flaherty, EI payroll premiums would have risen by 10 cents per $100 of insurable earnings for employees and 14 cents for employers, the Globe and Mail reports. Today, though, Flaherty is expected to announce that the increase will be kept at the same level of the one that took effect on Jan. 1, 2011, or five cents for employees and seven cents for employers.

The Globe and Mail

Idea alert

By Aaron Wherry - Wednesday, October 12, 2011 at 9:44 AM - 11 Comments

Scott Clark and Peter DeVries take on EI premiums.

Simply put, the EI premium rate is a bad tax – probably the worst tax that the government has available to raise revenues. It inhibits employment and economic growth; it is unfair in its impact on low-income workers; it is extremely complex to calculate and administer…

The best option would be to get rid of the EI premium rate altogether and replace it with an alternative source of revenue. One way this could be done is by replacing the lost revenues, about $20 billion, by increasing the GST and corporate income tax rates.  This would address the problem of the working poor by spreading the burden over much larger tax bases.  In addition, the GST low-income tax credit could be increased, sheltering these individuals altogether.

Policy alert

By Aaron Wherry - Tuesday, April 5, 2011 at 2:12 PM - 7 Comments

Jack Layton promises new family care initiatives.

Under the program, families hoping to build a self-contained, add-on unit for an elderly relative would be entitled to a forgivable loan that would cover half the cost of renovations up to a maximum of $35,000. Mr. Layton also promised to extend EI benefits for people looking after a dying relative to six months — up from six weeks — and to introduce a new, up-to-$1,500-a-year caregiver benefit to help struggling low and middle class families who are looking after a sick or injured loved one. He further vowed to close the loophole that prevents Canadians who have accessed maternity, adoption, sick or other leave from accessing regular EI benefits should they lose their jobs when they return.

Policy alert

By Aaron Wherry - Wednesday, March 30, 2011 at 4:34 PM - 11 Comments

Stephen Harper continues to review measures set out in last week’s budget: yesterday an EI credit for small businesses, today an extension of the capital cost allowance.

If re-elected, the Tories would offer a two-year extension of the capital cost allowance, which is currently set to expire at the end of the year.
The program allows businesses to accelerate the timing of their capital cost deductions by 50%, deferring taxation and improving financial return on investments in new equipment and machinery.

'The prime minister's decision'

By Aaron Wherry - Friday, December 3, 2010 at 11:05 AM - 49 Comments

The federal government was preparing last December to deal with the “the prime minister’s decision” to do away with the long-form census.

Human Resources and Skills Development Canada: Less reliable data would “compromise their ability” to determine EI eligibility, assess skills development and retraining, and apply the federal-provincial agreement on labour mobility.

Indian and Northern Affairs Canada: “Absence of reliable long-form data will not allow them to effectively manage, evaluate, and measure performance of programs in areas of aboriginal health, housing, education, and economic development.”

Citizenship and Immigration Canada: A broad range of programs dealing with selecting and settling immigrants, including a pan-Canadian agreement on foreign credentials would be hit. “A question in the long form on country of educational attainment specifically provides information to support this program.”

Ignatieff's shrinking ambition

By Paul Wells - Friday, October 8, 2010 at 9:00 AM - 0 Comments

Chris Wattie/Reuters

“Have you seen our home care package? It’s being unveiled as we speak,” a Liberal party guy told me outside a Starbucks in downtown Ottawa. He showed me his BlackBerry, which was displaying something official-looking. “Focus groups are jumping up and down over this.”

That wasn’t hard to believe. That morning in Gatineau, Michael Ignatieff had announced a $1-billion program to help people care for aging relatives at home. More and more of us have aging relatives, so the Liberal plan addresses a real concern. The Liberal plan would use Employment Insurance to give caregivers half a year off work with modest pay. That’s the way parental leave benefits already work. Another element in the program would pay a tax benefit of up to $1,350 a year to people providing home care. That’s how the Canada Child Tax Benefit works.

So: a program designed to address a perceptible need in an aging society. Proven delivery mechanisms. Modest cost. (No, really: on $280 billion in program spending, $1 billion is modest. It cost a lot more than that to hold a summit meeting in Toronto this summer.)

Continue…

Idea alert

By Aaron Wherry - Tuesday, October 5, 2010 at 11:47 AM - 0 Comments

Michael Ignatieff proposes new home care benefits.

At present, home-care providers in Canada can only obtain six weeks of EI benefits—and only then if they can prove that the person in their care is expected to die within 26 weeks. Liberals say that if they’re elected, those benefits will be expanded to six months and the terminally-ill condition will be removed … Liberals estimate that about 30,000 people in Canada will take advantage of their proposed improvements to EI benefits, compared to approximately 5,000 who are now using the six-week provision to stay at home with ailing relatives … The cost of expanding these EI benefits would be about $250-million a year, Liberals say.

At a cost to the federal treasury of about $750-million a year, Liberals are proposing to send monthly cheques, totaling up to a maximum of $1,350 a year, for people who are caring for sick or elderly relatives at home. As many as 600,000 people could be eligible for these cheques, Liberals estimate.

The Commons: Does anyone here know how to balance a cheque book?

By Aaron Wherry - Thursday, May 13, 2010 at 6:05 PM - 58 Comments

The Scene. Bob Rae opened this afternoon’s session with a vigorous display, lecturing the government on the need to reconcile environmental and economic policy and even thumping his desk with his right hand—his flare seemed to ignite a certain passion on all sides. So this last afternoon before a blessed break week was full of vim, most notably on the matter of our overdrawn national bank account.

“Mr. Speaker, it is the wrong choice to cut taxes for the largest and wealthiest corporations while the global economy remains fragile,” Bonnie Crombie cried from the back row of the Liberal side. “It is the wrong choice to cut taxes for the largest and wealthiest corporations while a debt crisis rages in Europe. It is the wrong choice to cut taxes for the largest and wealthiest corporations when markets fluctuate at the drop of a hat. Why does the government plan to borrow money and mortgage our children’s future to pay for its reckless corporate tax cuts?”

The Finance Minister did not have an answer for this one, but he did have aspersions (and in this place that’ll do). Continue…

A Charter case over EI benefits

By Colby Cosh - Thursday, May 6, 2010 at 11:20 AM - 22 Comments

Getty Images

In 2007, Sabrina Prokopiuk, 32, was laid off for four months from the Gap in Winnipeg’s Polo Park Shopping Centre while the store underwent renovations. Prokopiuk, who has Down’s syndrome, had worked at the store tidying changing rooms since November 1999. As far as her bosses were concerned, she was like any other employee. But when it came to collecting Employment Insurance, her Down’s had left her at a small disadvantage.

Prokopiuk had only been able to work 574 hours in the 12 months before the store went into mothballs. In Corner Brook, Nfld., or some other place with high unemployment, that would have qualified her easily for EI benefits. In Manitoba, it wasn’t quite enough; she needed 700. Manitoba’s Public Interest Law Centre is helping Prokopiuk appeal that EI board decision on the basis of the anti-discrimination provisions in the Charter of Rights. They have filed a memorandum with the Federal Court, which will designate an umpire to hear her Charter case, probably this fall or next spring.

Continue…

'Hold to clarify my amended response is the one I want used no figures'

By Aaron Wherry - Monday, March 29, 2010 at 1:37 PM - 7 Comments

Ministerial aide Ryan Sparrow helpfully suggests a new slogan for the next Conservative re-election campaign.

Bureaucrats calculated the value of the advertising campaign and prepared an answer the same day. Before making it public, however, they consulted Mr. Sparrow and other political officials on the proposed response. “The ad appeared on national networks, aboriginal and ethnic networks. The total TV media buy was approx $4,536,000. The Olympics package had a net cost of $1,849,829.00,” the chief of media relations, Patricia Valladao, said in an e-mail to Mr. Sparrow and two other ministerial aides, Michelle Bakos and Ana Curic.

Mr. Sparrow answered by telling the bureaucrats to “amend the response,” to simply say: “One 30-second TV ad was created in support of Canada’s Economic Action Plan. The ad started running the week of January 18th and will end with the Olympics. The ad highlights key government programs available to Canadians who have been affected by the economic downturn: extended EI benefits, retraining opportunities, apprenticeship grants and self employed EI benefits.”

Hard right? Hardly

By Andrew Coyne - Monday, March 22, 2010 at 7:28 PM - 115 Comments

Just so we’re clear: I don’t really care whether the Harper government conforms to one definition of conservatism or another. Neither do I carry any brief for conservatism, as such, though I might hold conservative views on specific issues. When I say that conservatism is dead in Canada, I am not mourning or despairing. I am merely stating a fact.

The reason that’s worth stating is that there is a party that continues to carry on as if it were conservative, though it conforms to no known definition of the word. And all right, yes, I’d prefer that people should be who they say they are and do what they say they will do, and that things should be called what they are and not what they are not.

So I suppose in that sense I should be delighted to find, via my friend Paul Wells, that I’ve got it all wrong: that the Conservatives are in fact robustly, unabashedly conservative, that indeed conservatism is “on the march across Canada.” Why, it’s the biggest swing to the right in “half a century.” It’s Harper’s hard right turn.

This is contrarian analysis at its finest. Under the Conservatives, spending, which conservatives once promised to cut, has been growing at a rate of 8 per cent a year. The budget, which conservatives once aimed to balance, is now in deficit to the tune of $54-billion, with literally no end in sight. Corporate subsidies, which conservatives once vowed to eliminate, continue to be doled out by the billions every year; much of the auto industry has been nationalized; the number of regional development agencies has increased by one. Conservative MPs now run around the country boasting of the pork they are bringing home to their ridings, complete with novelty-cheque signing ceremonies.

The top marginal rate of income tax remains where it was a generation ago, while the tax system has been further complicated with the addition of a slew of special credits for children’s sports, transit passes and other good causes. Employment Insurance has been larded up with supplementary payments that make a return to insurance principles more remote than ever. The Canada Pension Plan has been allowed to swell to Caisse de Depot-like dimensions. The great statist vehicles of the 20th century — Canada Post, Via Rail, the CBC — likewise continue to stalk the land, subsidies and privileges intact, while private oligopolies in air travel, finance and telecommunications remain largely protected from foreign competition. All were once the objects of conservative reform efforts. No longer.

The political reforms that were the bedrock of democratic conservatism in the age of the Reform party, aimed at giving more power to ordinary MPs and, via referendums, to the citizens at large, are now but a memory, replaced by a PMO whose all-controlling zeal exceeds even previous records. The philosophy that distinguished the conservative approach to constitutional matters — decentralizing power to the provinces, commitment to the equality of provinces and citizens — has been replaced by massive increases in transfers to the provinces generally and a raft of special concessions — powers, money, an ill-defined “national” status — to Quebec.

But that is to look at the matter through the narrow lens of fiscal, economic, democratic and constitutional conservatism. Rather than obsessing on such arcane matters — you know, the whole size and role of government thing — friend Wells encourages us to see the glass as socially full. Because even as it was giving ground on every one of all those other fronts, the government has been delivering for social conservatism. Why, “look at the victories” social conservatives have won, Wells suggests, “in just the past few months.” Yes, let’s.

Continue…

BUDGET 2010: The unemployed, youth, and families

By Philippe Gohier - Thursday, March 4, 2010 at 4:45 PM - 2 Comments

Ottawa plans to lean on changes to the Employment Insurance system to help Canadians cope with a job market that remains tough in several sectors. The government most notably expects manufacturing job losses to keep mounting, albeit at a slower pace, due to weak U.S. demand and the rise of the Canadian dollar. So in addition to previously announced reforms that extended the length of time unemployed Canadians could remain on EI by five weeks, the government is now expanding its work-sharing program, at a projected cost of $106 million over the next two years.

Under the work-sharing program, employees whose workweeks have been cut are entitled to collect EI payments to make up the shortfall in income. Thursday’s budget extends the amount of time individuals can take part in the program to 78 weeks from the previous maximum of 52 weeks. The move is a temporary one, though, and will be eliminated on March 31, 2011. The government estimates its combined EI-related measures will create or maintain 24,000 jobs by then end of 2010, at a cost of $2.7 billion over two years.

Thursday’s budget will also facilitate access to EI for workers who take a leave of absence from work after losing a family member as a result of a crime. The cost of the program is pegged at $6.6 million over two years.

Investments targeted at youth job creation include a one-time contribution of $10 million to the Canadian Youth Business Foundation aimed at young entrepreneurs, and $30 million to encourage businesses to hire recent college and university graduates. At-risk youth will benefit from an extra $30-million committed to skills development programs.

Meanwhile, single parents of children under six can expect to see their tax bill cut thanks to changes in the way $100 per month Universal Child Care Benefit is taxed. Under the current system, the benefit is added to a single parent’s income and taxed at their marginal tax rate, meaning single-income two-parent families, who are allowed to add the benefit to a non-working parent’s income, may pay less tax than their single-parent counterparts on identical UCCB payments. Ottawa now plans to allow single parents to add the income from the UCCB to that of their child, effectively eliminating the tax on UCCB. The change is expected to cost the government $5 million a year.

After much public deliberation over the value of Canada’s Own the Podium Olympic program during the Vancouver Games, the federal government has announced it will top up funding for elite athletes by $44 million over two years. The new funding is part of an overall boost to federal sports programs, such ParticipACTION and the Paralympics and Special Olympics, worth $62 million over two years.

While increases to benefits for families, youth and the unemployed are meager, they appear to be safe from the government chopping block. The budget includes an unequivocal pledge not to cut them in the future. The federal deficit fighting plan, the budget documents promise, will include no cuts to “major transfers to persons” nor will it feature cuts to transfers to other levels of government.

'Dear Minister Flaherty'

By Aaron Wherry - Tuesday, February 16, 2010 at 3:06 PM - 22 Comments

The NDP files its suggestions with the Finance Minister, including pension reform, EI reform, municipal funding, an extension to the home renovation tax credit and a repeal of planned corporate tax cuts.

In addition to job creation measures, the Government must address the looming structural deficit, as identified by Parliamentary Budget Officer Kevin Page. The deficit was caused, in part, by previous reckless reductions in corporate income tax rates. Like most Canadians, New Democrats recognize that in the long term, we cannot spend more than we collect. Yet your government has not only attempted to deny the existence of the structural deficit, it has aggravated the imbalance by reducing revenues despite the absence of any evidence that those tax savings have led to investments in jobs for Canadians. Your unbalanced corporate tax policy is exacerbating our overreliance on oil extraction, and contributing to a high dollar, which in turn hampers job creation and exports in the value-added sectors of manufacturing, forestry, aerospace and others. We propose that you announce the government will not proceed with additional cuts to the corporate tax rate in 2011 and 2012.

The Commons: Jack Layton doing as Jack Layton does

By Aaron Wherry - Monday, February 8, 2010 at 5:01 PM - 24 Comments

It was perhaps a bit odd that Jack Layton’s disclosure last week that he has been diagnosed with prostate cancer would be cause for consideration of his political career and public life to date. He is by no means doomed and is entirely likely to make a full recovery. But perhaps we in this culture crave any opportunity to pause for reflection.

As it is, Mr. Layton seems more inclined to carry on, showing up this afternoon to explain how and why the next session of Parliament should be dedicated, sort of like the Titanic, to putting “women and children first.” Here was Jack Layton as he is, and seemingly as he always has been: insistent and demanding and righteous and demanding, for the most part, to be greeted without irony. Continue…

A labour economist, a bureaucrat and a cabinet minister walk into a room … – Liveblogging the EI reform bill at HUMA

By kadyomalley - Thursday, October 8, 2009 at 3:36 PM - 11 Comments

It’s no blue-ribbon panel, but at least they’ll let us watch, right? Join ITQ as she liveblogs the gang over at Human Resources, where they’re about to kick off what could be a short and sweet — well, short, at least — review of the government’s proposal to tweak the employment insurance system to provide a few more weeks of coverage for long-term workers. On the witness list today is the minister herself, as well as Canadian Labour Congress president Ken Georgetti, United Steelworkers economist Erin Weir and Rosalie Washington.

Check back at 3:30 pm for all the action.

3:20:30 PM
Good afternoon, committeephiles, and welcome to what is, ITQ has just been informed, the *second* meeting on the EI bill. The minister is here, surrounded by the usual throng of serious-faced officials, as is her erstwhile fellow blue-ribbon panelist Mike Savage, who will be leading the charge for the Liberals. Also up for the red team: Maria Minna and Raymond Folco; Yves Lessard and Josee Beaudoin are here for the Bloc Quebecois, and Yves Godin – of course – for the NDP. As for the government — well, just as ITQ was about to do a nameplate check, the chair gaveled down, so that may have to wait for a minute or two so she doesn’t miss a second of the minister’s scintillating testimony.

3:30:57 PM
Okay, maybe “scintillating” isn’t quite the right word. Honestly, all she really has to do is recap the press release, but she has ten minutes to do so, and ITQ has every confidence that she’ll not only rise to the occasion, but work in at least one reference to the Economic Action! Plan, and possibly a warning to the opposition against bringing on that Unwanted Fall Election.

Continue…

The Commons: A difference of realities

By Aaron Wherry - Wednesday, October 7, 2009 at 6:24 PM - 46 Comments

The Scene. Michael Ignatieff stood and, perhaps feeling a bit parched, took a sip of water. Putting down his glass, he proceeded with his supposition.

The Prime Minister, the Liberal leader said, was planning to increase employment insurance premiums. This, he said, will deter employers from hiring. And this, he explained, would add to the tax burden. Across the way, Conservative MP Dean Del Mastro was loudly displeased.

“Will the Prime Minister admit,” Mr. Ignatieff finished, “that he is raising taxes and that tax increases will kill jobs?”

Shaking his head and shrugging, the Prime Minister stood with his version of events.

“Mr. Speaker, on the contrary,” he said, “this government has frozen premiums for employment insurance for this year and next. In the long term, these rates are determined by an independent commission.”

Mr. Ignatieff listened to this response, then stood with a conclusion.

“Mr. Speaker,” he explained, “this means that ‘Yes, we’ll raise taxes.’” Continue…

It's not about him, but now that you mention it…

By Aaron Wherry - Monday, September 28, 2009 at 1:26 PM - 9 Comments

I try again to explain Jack Layton.

This seemed a terrible day for the leader of the NDP. But if you were thinking Jack Layton had just turned himself inside out, that the unrelenting opponent of this government had just debased himself for the purposes of political expediency, you would be wrong. At least so says the NDP.

“Canadians are fair-minded and want their politicians to use common sense,” Brad Lavigne, the party’s national director, said over coffee a few hours after the vote. “And what you’ve seen is probably Jack Layton’s best week of his leadership.”

Really? “Absolutely,” Lavigne confirmed. “I’d say it’s one of his best weeks by far. In terms of seizing the opportunity, sticking to the principles, recognizing that it actually takes strength to get things for the people that sent us here. I think what Jack Layton has done this week is give a voice to the millions of Canadians who want to see this Parliament work and don’t want to go to an election.”

It's not me, it's you

By Aaron Wherry - Monday, September 28, 2009 at 10:27 AM - 22 Comments

Jack Layton tries again to explain himself.

In the end, as we debated whether we would support the $1 billion for the unemployed or give Harper the election only he and Ignatieff seem to crave, I kept coming back to the faces of the many people I’ve met who asked me to help them. For them, the financial support will make a big difference.

I feel anguish right now, but it has nothing to do with the criticism that has been levelled at us. No, it is that we haven’t been able to help more hard-working Canadians who are in need. It’s going to be a hard, hard winter for far too many of them.

'The choice before New Democrats is simple'

By Aaron Wherry - Monday, September 21, 2009 at 11:07 AM - 38 Comments

Jack Layton explains himself.

This new reform falls far short in many ways. It doesn’t cut waiting periods, increase benefits or create uniform access across the country. We are under no illusions that this bill fixes the major problems in the EI system. We will continue to work for further changes to EI. In fact, we have a dozen proposed laws before the House that would improve other elements of the existing system.

But my party cannot, in good conscience, vote down legislation that is a step in the right direction.

Mind trap of the day

By Aaron Wherry - Thursday, September 17, 2009 at 4:33 PM - 38 Comments

From Question Period this afternoon.

Hon. John McCallum (Markham—Unionville, Lib.): Mr. Speaker, I have a question for the finance minister. Does the increase in employment insurance premiums beginning in 2011 constitute a tax increase, yes or no?

Mr. Ted Menzies (Parliamentary Secretary to the Minister of Finance, CPC): Mr. Speaker, the simple answer to that is no. Let me remind Canadians what happened to the notional surplus that was in the EI fund years ago. It is gone. Those people who paid into it never got it back. We provided an arm’s-length board to manage that, so that can never happen again.