Thank you, Chair. I'm glad you have your water back and that we can appear.
For the record, I would state that the CLC would support removing the immigration provisions of this bill for separate consideration and consultation.
I probably won't have time to speak to it, but we'd also be very critical of the introduction of a tax-free savings account, which we'd see as a major step over the long term towards freeing investment income from taxation. It's potentially a very costly long-term measure.
That said, I will focus my remarks on the EI Financing Board. I agree with much of what has been said. I think the key change and objective in the bill is to ensure that future surpluses in the EI account, moving forward, could be used to reduce premiums, or for that matter, to enhance benefits. I think that in itself, in isolation, is probably a very modest improvement over the status quo, but it's really turning a page on history that I think can't be turned at this point. We have to come to grips with the legacy of the past decade.
As members probably know, in the Supreme Court next week they have agreed to hear a case on the legality of collecting a $54 billion accumulated surplus in the EI account. The federal government's case is that it was constitutional to levy a payroll tax, as indeed is the case. The question is this: if the previous federal government had levied a tax to reduce the deficit and debt, would they have chosen the EI premium to do so? I think not.
Considered in isolation, it's a very regressive tax. Its regressivity is justified in the EI context by the fact that benefits are proportional to premiums paid and income covered.
The second key point is that for several years, from the mid- to late 1990s when ministers were questioned about the accumulating surplus in the EI account.... Let's not forget that it was produced by the fact that we had a freeze on the level of the maximum benefit for 10 years. So the level of the maximum benefit was reduced by 30%. We had a shift to an hours-based system, so there was a lot less eligibility for the program. The justification for building up that surplus was that the accumulated EI surplus would remain in place to backstop the EI account itself, so that if we went into a recession or we went into a downturn, we wouldn't be having to increase premiums or reduce benefits.
So if we're just turning the page, where are we? We sit with a $54 billion surplus still sitting in an EI account, completely integrated with the public accounts. And we're creating a whole new account--which, by the way, is also completely integrated with the public accounts--that manages a reserve fund, with the reserve to be set not by the new board but by the government, by regulation.
So what has really changed? As far as I can see, the only thing that has really changed is that if that account accumulates a surplus moving forward, indeed, that surplus will be retained.
I guess, for our part, we say that we're not really prepared to just wave goodbye to that $54 billion and forget the history of how it was collected. At an absolute minimum, the reserve in the new account should be sufficient to fully backstop the EI fund in the event of a recession. Now, that doesn't cost you $54 billion, but it costs probably in the range of $10 billion to $15 billion, according to expert calculations.
I think the intent of the legislation, and quite rightly so, is to ensure that the new EI Financing Board has no role at all in setting the basic parameters of the EI program. It will have nothing to say about how the program is delivered; it's only about premium setting. I think that is the right approach, and the intention is correct. However, in our submission we do suggest specific wording to clarify that the new board should not do analysis on the program and its impact and delivery; that should remain the property of Human Resources and Social Development Canada. Nor should it be making any suggestions as to how the premiums should be divided; that's between workers and employers.
Some people might have noticed quite an active employer constituency asking to reduce the employer premium and shift it onto workers. I think it's essential to make sure this remains a political decision and is not within the purview of the new board.
I think those are the most important points: we need a reserve fund that does allow employment insurance to act in a counter-cyclical fashion if and perhaps when we hit a recession, and to ensure that the new board plays an extremely narrowly defined and limited role. I think it is also important to ensure there is still full ministerial accountability for the employment insurance program and how it operates, and that separating the fund doesn't remove the minister from responsibility and accountability to the House for the program.
If I have a minute to speak to--