Mr. Speaker, the Supreme Court of Canada, in its decision dated December 11, 2008, declared that EI premiums for the years 2002, 2003 and 2005 were collected unlawfully. In its decision, the court found that EI premiums for those years did not constitute a regulatory charge but rather represented a payroll tax. Since no delegation of taxing authority was provided for in the legislation, the premiums constituted an unlawful tax. The court suspended the declaration for one year in order to give the government time to rectify the invalidity.
Through sections 227 and 228 of the Budget Implementation Act, 2009, which came into force on March 12, 2009, Parliament set the premium rates for 2002, 2003, and 2005. This responded to the Supreme Court’s decision and provided authority for the collection of premiums for those years, rectifying the invalidity.