Auditor General Sheila Fraser has once again slammed Ottawa for running huge surpluses in the Employment Insurance fund.

In her latest report, Fraser said the federal government took in an extra $2 billion in the last fiscal year, pushing the EI surplus to a massive $46 billion.

Fraser said that figure is more than three times the maximum reserve that the chief actuary of Human Resources Development Canada considered sufficient in 2001.

Auditor General Sheila Fraser
Auditor General Sheila Fraser

"Parliament did not intend that a surplus would accumulate beyond what could reasonably be spent on Employment Insurance," the auditor general noted.

Fraser added that she believes the government has not observed the intent of the Employment Insurance Act.

The whopping surplus in the EI fund is something that the auditor general has criticized each year since 1999, and she urged the government to take the necessary steps to resolve it.

The EI surplus has been a frequent target for the government's critics, who say the Liberals should lower premiums or pay out more in benefits.

Tight privacy laws hamper some investigations: Fraser

Tough rules on privacy and insufficient coordination hamper investigations into money laundering and terrorist financing, Fraser also said in her report.

The Financial Transactions and Reports Analysis Centre (Fintrac) was set up in 2000 by the federal government to fight international money laundering. Its scope was broadened after the 9/11 attacks to include terrorist financing activity.

Financial institutions are required to pass on all suspicious transactions to Fintrac, which analyzes the reports for links to money laundering or terrorist financing. However, Fintrac is limited to passing on only bank account numbers, dates and times of transactions and names of account holders.

"Privacy concerns restrict Fintrac's ability to disclose intelligence to the police. As a result, law enforcement and security agencies usually find that the information they receive is too limited to justify launching investigations," Fraser said.

"There is a delicate balance between privacy rights and the information needs of law enforcement. Determining the right balance is up to Parliament," she said.

Fraser pointed out that many other countries permit the flow of more information between financial investigators and law enforcement agencies.

Since its inception, Fintrac has cost about $140 million. The audit of the centre was done in anticipation of a required review by a parliamentary committee by next July.