Another Big Employment Insurance Surplus
Under current rules, the EI premium rate is supposed to be set at the precise level anticipated by the Chief Actuary to match program revenues with program expenses. (The accumulated surplus of more than $50 Billion run up under the Liberals as a result of deep benefit cuts and slow premium reductions sits in a sort of accounting limbo in what the Minister of Finance calls a fictitious account. Notional interest on the EI surplus is credited to the EI account but has no impact on the premium-setting process and is not deemed by the government to be a potential source of funds for benefit improvements.)
As it turns out, the EI account ran another big annual surplus in fiscal 2006-07, to the tune of more than $1 Billion above and beyond what was forecast in the 2006-07 Budget. Revenues came in at $16,789 Million compared to a forecast of $16,125 Million – a difference of $664 Million; and EI benefits (including active labour market measures) came in at $14,084 Million compared to a forecast $14,580 Million, an under-shoot of $496 Million. Add the revenue overshoot to the spending undershoot, and the surplus is $1.1 Billion, assuming that program administration costs of $1.3 Billion came in as forecast. (These are charged to the EI account but not counted as benefits, so the break – even premium rate has to generate a small excess of revenues over benefits.)
One thing is clear – there is a lot of fiscal room to expand active labour market measures in the context of ongoing severe industrial adjustment, not to mention EI benefits. Meanwhile, employer cries for premium cuts will likely become even more insistent.