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  • Betting on Bitumen: Alberta's energy policies from Lougheed to Klein June 8, 2017
    The role of government in Alberta, both involvement and funding, has been critical in ensuring that more than narrow corporate interests were served in the development of the province’s bitumen resources.  A new report contrasts the approaches taken by two former premiers during the industry’s early development and rapid expansion periods.  The Lougheed government invested […]
    Canadian Centre for Policy Alternatives
  • Canada-China FTA will leave workers worse off June 2, 2017
    Global Affairs Canada is currently consulting Canadians on a possible Canada-China free trade agreement. In CCPA’s submission to this process, CCPA senior researcher Scott Sinclair argues that an FTA based on Canada’s standard template would almost certainly reinforce rather than improve upon Canada’s imbalanced and deleterious trade with China. It can also be expected to […]
    Canadian Centre for Policy Alternatives
  • Faulty assumptions about pipelines and tidewater access May 30, 2017
    The federal and Alberta governments and the oil industry argue that pipelines to tidewater will unlock new markets where Canadian oil can command a better price than in the US, where the majority of Canadian oil is currently exported. Both governments have approved Kinder Morgan's Trans Mountain Expansion Project, but a new report finds that […]
    Canadian Centre for Policy Alternatives
  • Weathering the storm: is this the end of CRA’s political activities audits? May 5, 2017
    Yesterday, following a panel’s recommendation to allow charities more freedom to speak out, the federal government decided to suspend the Canada Revenue Agency’s controversial political activities audit program. Indeed this is good news for Canadian charities. Everyone at the CCPA is proud of the role our organization has played in challenging these audits and in […]
    Canadian Centre for Policy Alternatives
  • Unauthorized dams built in BC's northeast for energy companies' fracking May 3, 2017
    A subsidiary of Malaysian state-owned Petronas, the company behind a massive Liquefied Natural Gas plant proposal near Prince Rupert, has built at least 16 large unauthorized dams in northeast BC to trap water used for fracking operations, the Canadian Centre for Policy Alternatives has learned. Read the report.
    Canadian Centre for Policy Alternatives
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The Progressive Economics Forum

Flaherty’s Funny Math with the EI Surplus

The Parliamentary Budget Office has come out with a report, suggesting that the Conservatives will likely balance the budget ahead of schedule. But, and it’s a big but, if there were no EI surplus, there would be no balanced budget in 2016. And the annual surplus in the EI Operating Account is no small potatoes – it’s forecast to be at least $3.5 Billion in 2014. But this forecast is based on an EI coverage rate of 41%, and recently it’s been more like 38%, meaning the 2014 EI surplus will probably end up being over $4 Billion.

(How anyone with a heartbeat thinks it’s OK to rack up a $4 Billion surplus in the EI account when coverage is only 38% is beyond me. But the media coverage on this suggests premiums are too high, not that EI coverage is too low. A whole other post, for another day.)

Premium rates over the past couple of years have been set with the assumption that coverage would be much higher than they have been. Too many precarious workers aren’t qualifying for benefits, and too many are exhausting benefits before finding work. Fortunately for Mr. Flaherty, that has saved the EI account billions of dollars. Decisions made by the Finance department have also saved the EI Account money, but have pushed these costs onto households and social assistance systems.

For example, stimulus measures to extend the benefit period recognized that spells of unemployment are usually much longer during a recession and recovery. These stimulus measures were cut in Budget 2011, but they are still very much needed. One in five unemployed workers have been out of work for more than six months, compared to a pre-recession rate of 1 in 8.

Migrant workers were cut off from receiving parental and other special benefits, even though they pay into the system, and cannot access regular benefits. This decision certainly was made with only the bottom line in mind, fairness to workers be damned.

EI call centres and claims processing don’t have the resources to meet demand. This means that workers trying to navigate the system often have difficulty contacting a real person to help them. If everything fits in the right blocks in the automated system, you’re golden, but if some piece of information is missing, or incorrect, you’re waiting months before you receive a decision, let alone payment. If you have to appeal your decision, it could be several more months before the case is resolved. More and more workers are needing to turn to other support systems in the interim, such as personal debt or social assistance. More resources are desperately needed in the system to ensure timely service for workers needing EI, but ESDC and Service Canada are facing cutbacks just when their services are needed the most.

But, Flaherty says, no,  the increasing stinginess in the system, and corresponding rapid accumulation of funds, have nothing to do with balancing the federal books. It’s just a coincidence that the EI fund was able to pay back its accumulated deficit from the recession so quickly, and that helpfully, that amount is enough to balance the books a year early.

He’s sounding an awful lot like Paul Martin used to.

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Comments

Comment from Allan
Time: March 24, 2014, 1:54 pm

ei should tell people the math on how they pay you

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