By Jordan Bateman, BC CTF. The Canadian Taxpayers Federation (CTF) has issued a new report calling for changes to the Employment Insurance (EI) system that would allow Canadians to keep the money they and their employers pay in EI taxes in a personal unemployment account.
“Ottawa is using Employment Insurance as a cash cow,” said CTF Federal Director Gregory Thomas. “They collected $3.3 billion more in EI tax last year than they paid out in benefits, and their latest forecast says they expect to collect $4.2 billion more this year.”
Under the CTF plan, EI contributions would not go into government coffers, but into personal unemployment accounts, that could be accessed if the worker became unemployed. If at the time of retirement there was money left over in their unemployment account, it would stay with the employee as their own retirement savings.
“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,” continued Thomas. “And if you’re rarely without work, you would have a nice little nest egg once you retire.”
The CTF report, titled Unmasking Employment Insurance: How EI Increases Unemployment and Steals Billions from Working Canadians also shows that EI is widely abused by frequent claimants, and grossly unfair to workers in cities, especially in Ontario, British Columbia and Alberta.
“B.C. workers have paid $53.9 billion in EI taxes since 1981, but collected only $43.3 billion in EI benefits,” said CTF B.C. Director Jordan Bateman. “It’s another example of how B.C. taxpayers subsidize Quebec and Atlantic Canada.”
Tax information from rural Newfoundland and Labrador between 2008 and 2010, reveals that 89 per cent of working-age tax filers reported EI income on their tax returns, compared to 38 per cent in Port Alberni (B.C.’s highest-percentage EI community) and just 14 per cent in Vancouver.
Not only is the federal government taking more EI money out of B.C. than necessary, it is unfairly deciding who can receive EI.
In Newfoundland and Labrador, a worker laid off after earning $16,200 over six months on the job, would be eligible for 34 weeks of EI, and a total benefit of $16,830. That same worker, in precisely the same circumstance, would receive nothing in Abbotsford, Vancouver, Victoria and Southern Coastal B.C.; $6,174 over 18 weeks in Southern Interior B.C., and $11,880 over 24 weeks in Northern B.C.
“If you’re a British Columbian who has played by the rules, paid your taxes and has stayed gainfully employed over the years, this current EI system is nothing but a massive tax grab from you,” concluded Bateman.
To get the detailed 30-page CTF expose on Canada’s EI rip-off, click HERE.