EI and the Soaring Federal Deficit
If the federal deficit for 2009-10 soars by more than $16 Billion from $34 Billion to over $50 Billion, it won’t be mainly because of a jump in EI expenditures as Finance Minister Flaherty seems to have suggested.
True, the 2009 Budget EI projections now look badly wrong. The forecast increase in total EI spending from 2008-09 to 2009-10 was just $3.3 Billion, including about $1.5 Billion for new EI measures announced in the Budget. Thus higher unemployment was expected to add less than $2 Billion to the total EI Bill.
With regular EI claims now running about 50% higher than in the past fiscal year, the bill will jump by about $4 Billion per year.
The $2 Billion difference between the Budget forecast and the likely cost of the EI program is big – but scarcely the biggest factor in the expected jump of more than $16 Billion in the deficit.