Sure. Let me start with two or three important broad points. The first one, which I've already mentioned, is that the system has effectively been changed so much from its intended purpose. That's the biggest single difficulty with it today. We no longer have a true insurance program; we have a grab bag of social policies wrapped under this payroll tax program, which both employers and employees pay. So you start with that fundamental problem, and the numbers are now pretty staggering. Half the premiums collected go to pay for things that have nothing to do with regular benefits for employment loss.
So you start with that, and this is going to create all kinds of difficulties. I think Sharon just mentioned one of them. If you're thinking about good public policy in terms of social programs you want to develop, you're already cutting out a whole bunch of people who are not paying EI premiums, because they're not employed or not part of the program in some way. That's clearly an issue.
In terms of dealing with some of the specifics that exist, I mentioned the 1.4 times premium that employers continue to pay today. This is a decades-old decision. The world of work and the marketplace in Canada today are very different from the world at the time this rule was brought in. We don't think there's a rationale anymore to continue to ask employers to pay 1.4 times the employee premium. Our recommendation is to phase it out over a number of years—say, four years—and get it down to a level premium.
We're also very concerned about employer over-contributions to EI. In our view, this is a major issue in that employees with an over-contribution in a particular year will get that refunded through the tax system, but that's not true for employers. We have spent a lot of time trying to get moving on this issue. What we are told is that it would be administratively difficult to design a system in Canada's the tax program to track and refund employers who make the same overpayment as employees when they change positions during the year, and the payments are made again.
We've quantified the problem to the extent that we think this is not trivial. Perhaps it's in the several hundreds of millions of dollars a year of over-contributions by employers. So while there are some other issues under the broader framework, those are two specific ones we think should be addressed.