Sunday, September 13, 2009

Jim Flaherty’s EI tax

Ruh roh:
The recession, with employment falling and the number of unemployed skyrocketing, will cause deficits in EI over the 2009–2011 period. The government now plans to recoup these losses partly by raising EI premiums in 2012, to compensate for the previous EI deficits.

Some may argue that current policy is very unfair to working Canadians. They financed an enormous EI surplus over the mid 1990s , which contributed heavily to the elimination of the deficit in 1997. After that EI surplus was contributed to debt reduction, the government then adopted a “break even over the economic cycle” policy for EI.

Mr. Flaherty’s update gave no profile to the very significant role of the EI surplus of 2012–2014, in the forecast deficit reduction. As well, he pledged to return to balanced budgets without a tax increase. Isn’t an increase in EI premiums a tax increase?
I think that is a rhetorical question that Dale Orr is asking. But I'm sure we'll hear otherwise.