Employment Insurance needs makeover: Taxpayers federation

Report calls for personal unemployment accounts, retirement savings
|labour-reporter.com|Last Updated: 11/22/2013

Canadians should be allowed to keep the cash paid into the Employment Insurance system in a personal account, according to the Canadian Taxpayers Federation.

This week, the CTF released Unmasking Employment Insurance: How EI Increases Unemployment and Steals Billions from Working Canadians. In it, the federation called for an overhaul of the current EI program which would allow workers to keep the money deducted for EI premiums in a personal unemployment account, instead of going into government coffers.

Under the federation’s plan, EI contributions would be accessed if an employee became unemployed, or could be contributed towards retirement.

“Ottawa is using Employment Insurance as a cash cow,” said Gregory Thomas, federal director of the CTF. “If you’re a frequent EI claimant, you’re going to have to make your EI savings go further, or you’re going to have to find work. And if you’re rarely without work, you would have a nice little nest egg once you retire.”

The report also indicated EI is widely abused by frequent claimants – and skewed negatively towards Ontario, British Columbia and Alberta. For instance, workers in those provinces paid $103 billion more into EI than they collected between 1981 and 2009. That compares to workers in Newfoundland and Labrador, who collected $14 billion more than they put in, according to Thomas.

And whereas 62 per cent of EI claimants in Newfoundland and Labrador made at least three claims in the past five years, only eight per cent of Albertans did the same.

“Ottawa keeps telling Canadians to save more for retirement. If the government got its hands out of the pockets of working Canadians, a gainfully employed couple each earning $47,400 a year could save a $67,000 nest egg in ten years from keeping the EI contributions that are taxed away from them now,” Thomas went on to say. “Rather than hiking CPP taxes, as some premiers are suggesting, why not let Canadians keep the thousands in EI taxes they already pay and never see again.”

The report comes on the heels of a Statistics Canada release, which indicated the number of EI beneficiaries was down 1.4 per cent in September. That was attributed to notable declines in Ontario and British Columbia and smaller drops in Saskatchewan and Alberta – while claims went up in Quebec, Manitoba and the Atlantic provinces.

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