Posted: Wednesday, 24 October 2012
Introduction
On October 18, 2012, the Conservative government tabled a second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012, as well as other measures. This 443-page omnibus Bill implements certain income tax measures and amendments to the Income Tax Act through a series of tax changes. For instance, Bill C-45 proposes to include an employer’s contribution to a group sickness or accident insurance plan in an employee’s income in certain circumstances, which could result in increased taxation for workers with these benefits.
This Bill also contain measures affecting the Employment Insurance program, the Canada Labour Code and labour relations at the Canada Revenue Agency, the environment, health and safety, the Canada Pension Plan, and the pensions of Members of Parliament and employees of the federal government. Most of these proposed changes could have been tabled on their own, since they have nothing to do with the federal budget.
Employment Insurance
Bill C-45, Part 22, proposes to amend the rate-setting regime in place under the current Employment Insurance Act with the suspension of the Canada Employment Insurance Financing Board (CEIFB), and the dissolution of the Canada Employment Insurance Financing Board Act. The employment insurance rate shall now be set by the Governor in Council on the joint recommendation of the Minister of Human Resources and Skills Development and the Minister of Finance.
The rate continues to be set so as to balance forecast premium revenues and forecast program expenditures (including administrative costs) on a forward-looking basis for the coming year, so that at the end of the year, the total amount credited since 2008 is the same as the total amount charged since 2008.
This premium-setting formula, combined with the fact that there is no Employment Insurance reserve fund, means that premiums will continue to rise in high unemployment periods.
The premium payers (employees and employers) should have closer input into the premium-setting process and effective joint control with the government over the management of any reserve funds and the use of any surpluses.
In past submissions to the government and to Parliamentary Committees, the CLC called for a separate Employment Insurance Account, governed by an EI Commission or similar body established at arm’s length from the federal government. We argued that the EI Account and any surplus funds placed in a reserve fund or premium stabilization fund should be used only for EI purposes.
CLC Analysis of the Budget Implementation Bill — Part 2 (Bill C-45)