Evidence of meeting #49 for Public Accounts in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was question.
A recording is available from Parliament.
4:30 p.m.
Assistant Comptroller General, Financial Management and Analysis Sector, Treasury Board Secretariat
You can go back for many years of the public accounts.
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Liberal
4:30 p.m.
Assistant Comptroller General, Financial Management and Analysis Sector, Treasury Board Secretariat
It is current as well.
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Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Thank you, Mr. Chair, and my thanks to our witnesses.
In your comments, Mr. Wiersema, you mentioned Parliament's attention to significant changes to the accounts for the employment insurance program as a result of amendments to the Employment Insurance Act. One such amendment was the closure of the employment insurance account, which at one time had a surplus of $57 billion. It only had a tracking system but not an account. It would appear to me that the government had a prerogative to open a new account. Once the $57 billion was siphoned off, you would need to set up another account.
You also said that it now has a deficit of $4 billion. I'm wondering why there is a deficit, how that happened, and what the new rates are going to become. When we come out of this recession, we will require an account reflective of the needs of EI.
4:30 p.m.
Deputy Auditor General, Office of the Auditor General of Canada
The member referred to the government's having the prerogative to open a new account. I thought I should indicate once again that this was done through legislation, through amendments to the Employment Insurance Act as part of the budget bill last year. This wasn't the government's doing; this was authorized by Parliament.
With respect to the EI account, the financial statements for the year ending March 31, 2010, are included in volume 1 of the Public Accounts. I refer the member to page 4.17. There you will see the new EI operating account for the year ending March 31, 2010. It shows that the EI program collected total revenues, primarily EI premiums from employees and employers, of some $17 billion. It paid the expenses of some $23.7 billion. There were benefit enhancement measures from the government of some $1.5 billion, leaving a net deficit for 2010. Actually, it's $5 billion as opposed to the $4 billion I previously quoted. The new account, as of March 31, 2010, is in a deficit situation.
4:35 p.m.
Conservative
4:35 p.m.
Deputy Auditor General, Office of the Auditor General of Canada
Some of the expenses exceeded premiums collected.
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Conservative
4:35 p.m.
Deputy Auditor General, Office of the Auditor General of Canada
Well, the premium rate has—
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Conservative
4:35 p.m.
Deputy Auditor General, Office of the Auditor General of Canada
The premium rates have been reduced. I don't have the numbers here, but—
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Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
The premium rates were frozen for two years, so now there has been an establishment—
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Liberal
4:35 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
They have not been reduced; they have been kept unchanged. They have been frozen throughout the recession. At one point, they spent $100 per—
4:35 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
I'd like to go to Finance. We had the worst recession since the 1930s. We've come out of it by all accounts better than just about all the countries around the world, particularly the industrialized countries. With respect to the higher EI benefits, is there any idea from Finance how those have affected the public accounts for 2010?
4:35 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Are you referring to the EI benefit, the account itself, or the freezing of the rates?
4:35 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
I'm interested in the freezing. Now we're at a position where we have had to reset the rate. How has that freezing affected the public accounts for 2010?
4:35 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
The account was created that year, so the old deficit has led to an increase in the overall deficit of the government. The way the board has been set up, the maximum increase in the rate that would have been possible was 15¢. That's why there's a cap on the increase in rates. If the board didn't follow the rules, they would have increased the premium by 15¢ to offset the increase in benefits, ensuring that the accounts would not have gone so deeply into deficit. It would probably have added a deficit anyway—but one of a larger size.
4:35 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Instead of 5¢, it would come closer to balancing—
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NDP
David Christopherson NDP Hamilton Centre, ON
I'd kind of like to think of it as the best being last, but that would be my view, of course.
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Voices
Oh, oh!
4:35 p.m.
NDP
David Christopherson NDP Hamilton Centre, ON
You would expect that.
I just want to throw in my 2¢ worth on this EI. It's interesting that the Conservatives and Liberals want to spend so much time talking about it--very interesting. I just want to recap, if I can, so it's clear.
First of all, it's not taxpayers' money. It's not taxes that pay for this—correct me if I'm wrong. It's premiums from employers and employees, correct?
