Saturday, December 13, 2008

Ottawa Loots Worker's Employment Insurance Fund

Looting of the EI fund: Billions owed to unemployed
By Peter Ewart

The federal government devotes considerable resources to what it believes are Employment Insurance “cheaters,’ i.e., people who, according to its rules, should not be allowed to collect Employment Insurance benefits.

But the question must be asked: Who is, by far, the biggest cheater of all? Try the federal government itself. Over the last few years, a large surplus has been built up in the EI fund amounting to some $57 billion as of March 2008. This fund was accumulated as a result of worker and employer contributions – there was no government contribution whatsoever.

Yet this did not stop either Liberal or Conservative governments from looting this fund and using it for other purposes. In the business world, the term for such dark practices is embezzlement, and it can fetch you two to five years in a penitentiary. The difference is, of course, that the government has carried out its theft in broad daylight.

Last Spring, the Conservative government finally announced that it was doing away with this practice of dipping into what are supposed to be insurance payments for laid off workers. It has since formed the Canada Employment Insurance Financing Board, which supposedly will now ensure the funds are used solely for unemployment related purposes.

However, aside from $2 billion in start up money, the approximately $55 billion that is owed will not be returned to the fund. The government gets to keep it all, even though it contributed nothing.

What is the loss to workers in such British Columbian towns as Mackenzie, Fort St. James, Quesnel, Prince George, Kamloops and Port Alberni? As a province, BC has about 12% of Canada’s population. So, if we take 12% of the $55 billion, the amount that BC workers are owed (but may never see) is between $6 billion and $7 billion.

Such a cushion would go a long way to ease the pain of workers in communities like Mackenzie, extend benefits, as well as pay for a large amount of retraining. Indeed, that was what the EI fund was supposed to be for in the first place.

All of this puts another kind of light on other government funding. A couple of years ago the federal government announced that it will be supplying $1 billion over ten years to help the province of BC cope with the economic and environmental devastation caused by the massive pine beetle problem.

At the time, not a few commentators praised this “contribution,” and hailed the government’s “generosity” and “forward thinking.” But how are the workers and communities of British Columbia ahead in all of this? Someone steals $6 billion from you and gives back $1 billion, and you are supposed to be happy?

And then we have this “progressive coalition” led by the Liberal Party of Canada. Although it, too, promises no more “dipping” into the EI fund, nowhere in the Coalition’s economic plan does it indicate that the federal government should pay back the $55 billion. That is not surprising because the looting of the EI fund actually began under a Liberal government back in the 1990’s. As the old saying goes, the leopard doesn’t change his spots.

These days there is a lot of talk about bailing out the banks, auto monopolies, and other big companies. Before we get into bailouts of big shots, shouldn’t we focus on paying back the $55 billion owed to the unemployed of this country?

Peter Ewart is a writer, college instructor and community activist based in Prince George, BC. He can be reached at:

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