CBC Digital Archives

Employment Insurance: Surplus grows in EI fund

Employment insurance is a legacy of the Great Depression, and remains a pillar of Canada's social safety net. The system was created to provide an income while unemployed workers find new jobs, but expanded to include seasonal workers, new parents and those caring for ill relatives. Canada's EI system was once among the most generous plans in the world, but tightened rules in 1996 brought surpluses in the billions of dollars. CBC Digital Archives documents how employment insurance has evolved since 1941.

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The employment insurance cuts of 1996 were deep but noble in purpose: to help Canada eliminate its deficit. Three years later, the dreaded deficit has been slain and the EI account is robust with a $21 billion surplus. Jane Stewart, minister of human resources, believes it's important to preserve a healthy fund "for a rainy day," but Auditor General Denis Desaultels says it's just too high. In this CBC-TV news report, opposition critic Chuck Strahl and Ontario premier Mike Harris say EI premiums must come down. 
• Sheila Fraser, who was appointed to a 10-year term as auditor general in 2001, continued to hammer the government for maintaining massive surpluses year after year. In 2001 the chief actuary at EI calculated that a surplus of $15 billion was sufficient, but that year it topped $36 billion.
  • As of late 2008 the EI surplus had ballooned to $54 million and the government was in court over it. The case, in which two Quebec unions claimed it was unconstitutional for the federal government to divert the EI surplus into general revenues, went all the way to the Supreme Court.

• In December 2008 the court ruled that the government was not incorrect in using surplus EI funds for related social programs. However, it also ruled that in 2002, 2003 and 2005 the cabinet improperly set EI premium rates without authorization from Parliament.

• In the 2008 budget the Conservative government promised to set up an independent Crown corporation to manage the EI surplus and see that its funds were reserved for unemployed workers. 

Medium: Television
Program: The National
Broadcast Date: Oct. 27, 1999
Guest(s): Denis Desautels, Mike Harris, Paul Martin, Nancy Riche, Jane Stewart
Reporter: Eric Sorensen
Duration: 2:31

Last updated: February 8, 2012

Page consulted on September 10, 2014

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