Worker’s insurance debt: Ottawa is being asked to step in

With EI premiums set to rise in the new year, employers and workers are calling on the federal government to step in and relieve the program of the massive debt burden it has sunk into since the COVID pandemic. – 19.

The program, which is funded entirely by premiums paid by workers and employers, had accumulated $25.9 billion in debt by the end of 2021, according to the Office of the Chief Actuary (OCA).

A staggering number of Canadians have been out of work during the pandemic, and eligibility rules for the program have been relaxed to make it easier to access benefits. But since then, the labor market has rebounded and temporary changes to the employment insurance program have been reversed.

The current deficit occurred because of the pandemic and it is not the fault of any employee and it is not the fault of any employersays Jasmin Guénette, vice-president of national affairs at the Canadian Federation of Independent Business (CFIB).

After a two-year freeze, EI premiums are set to increase by $0.05 per $100 of income in 2023, the maximum increase allowed in one year by law. However, the increase is less than what the Office of the Chief Actuary has recommended for the program to reach by 2029.

Nancy Healey, employers’ representative at the Canadian Employment Insurance Commission, says that “companies (and) workers are concerned about the amount of debt in the EI account“.

The EI system is overseen by a commission that regularly reviews issues and the complaints system and its funding. Commissioners make workers and businesses heard, often consult their constituents and raise their concerns with tenured officials.

The labor representative on the commission, Pierre Laliberté, reports that the federal government has not indicated whether it intends to repay part of the debt. “Everyone was surprised that at the budget level there was no compensation or partial compensation for the costs during the pandemic.»

Asked if there were plans for the federal government to pay some of the debt, a spokeswoman for Jobs Minister Carla Qualtrough said in a statement: “this debt is settled over many years, with premium rates set on the basis of seven years of profitability forecasts.»

With the $0.05 increase, the rate will drop to $1.63 in 2023, which remains one of the lowest rates seen in Canadian historysaid Jane Deeks, communications director for the minister.

In 2021, the Liberals campaigned on a promise to modernize EI, pledging to expand the program to cover the self-employed and close gaps, including those highlighted by COVID-19.

Miles Corak, professor of economics at City University of New York and a longtime EI researcher, said the reform should include changes to how the program is funded.

In a memo released by the CD Howe Institute earlier this week, Corak argued for tripartite funding for the program, with employers, workers and government contributing. In his view, workers and employers should not be burdened by unexpected economic shocks such as the pandemic, which causes an increase in involuntary unemployment.

Sometimes employees are ready to work, are in the right place and have the necessary skills, but the jobs just aren’t available.wrote Miles Corak in the memo to Minister Qualtrough.

It suggests that the federal government is covering increased program costs caused by unexpected economic shocks. At the same time, it should collect any surpluses accumulated during periods of low unemployment.

Although the Liberals did not give a timetable for the implementation of the reform, they had to present their plan before the end of the year.

The idea of ​​having the government contribute to the program is not new. Before the 1990s, employment insurance was funded by contributions from workers, employers and the federal government.

Unifors union president Lana Payne wants federal contributions reinstated”to address the accumulated program deficit and support long-term improvements to the program for workers.»

However, Jennifer Robson, an associate professor of political leadership at Carleton University in Ottawa, would be surprised if there was much enthusiasm from the federal government to contribute financially. “My impression is that the current state of mind in the Ministry of Finance is much more about budget restrictions.»

Nojoud Al Mallees, The Canadian Press

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