Mr. Chairman, committee members, on behalf of the Fédération des travailleurs et travailleuses du Québec, I thank you for allowing us to express our opinion, in particular on Part 24 of this bill.
With respect to the employment insurance account, I would say, from the outset that, for the FTQ, eliminating the employment insurance account is an unconstitutional act, contrary to democracy. Bill C-9, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures, states: “The account in the accounts of Canada known as the Employment Insurance Account is deemed to have been closed at the beginning of January 1, 2009 and removed from the accounts of Canada at that time.”
The bill adds that only those premiums and other amounts collected under the employment insurance plan as of January 1, 2009 will be included in the new employment insurance operational account. To take this kind of action, the Conservative government assumes it has constitutional authority to cancel public accounts, the amounts contributed and counted for employment insurance plan purposes of $57 billion in the employment insurance account. And yet, in its previous budget, the government was compelled, following a judgment by the Supreme Court of Canada in the challenge by the Syndicat national des employé(e)s de l'Aluminium d'Arvida and by the CSN, to have the premium rates for 2002, 2003 and 2005 passed by the House of Commons in accordance with the imperative democratic rules provided for under the Constitution of Canada. The purpose of the government's efforts at the time was clearly to adopt premiums for the purposes of the employment insurance plan, not a general tax.
Now the government is clarifying the scope of the amendments adopted in previous budgets respecting the setting of the premium rate with respect to cumulative surpluses in the employment insurance account. These are cumulative surpluses, remember, reducing access to employment insurance for thousands of workers in Canada, with all the negative effects that result from that for those people and the communities to which they belong, and systematically setting premium rates distinctly higher than the atrophied employment insurance system through various cuts since the early 1990s.
Moreover, all stakeholders who have had to analyze the premium rate setting process, in particular, have observed that rates have been set based on other imperatives than the financial imperative, essentially the employment insurance plan. The Canadian Institute of Actuaries did it, as did Judge Gascon of the Superior Court and Judge LeBel of the Supreme Court of Canada. Judge Gascon held that the fact nevertheless remained that, despite their scope—he talked about cumulative surpluses—criticized by the Auditor General of Canada and the Chief Actuary of HRSD, one searches through the evidence in vain for justifications and explanations for maintaining these surpluses at the level where they stand. Judge LeBel held as follows, on behalf of the Supreme Court of Canada: “In my opinion, those amendments had a significant effect on the validity of such levies in the circumstances in which they were adopted, that is, at a time when government representatives could not have helped but see that employment insurance revenues in fact greatly exceeded what the system required and that those revenues no longer had an actual connection with the system.”
In 2005, the government put a legislative framework in place to exclude the cumulative surpluses in the employment insurance account from the premium rate-setting process. It also altered the premium rate-setting parameters by stating that the rate had to be set based on the estimated costs of the plan for the subsequent year, not on the basis of the maintenance of a reserve to prevent upward fluctuations in premium rates at the time of an economic slowdown, a role that cumulative surpluses were officially supposed to play in the employment insurance account.
Despite this new rate-setting mechanism, the rates adopted since 2005 to cover only the costs of the employment insurance system, with the exception of 2010, nevertheless had the effect of increasing the cumulative surpluses in the employment insurance account by nearly $8 billion. However, Judge LeBel of the Supreme Court did not see fit to comment on the legislative amendments since 2005 because they were not directly concerned by the legal issue.