Canada

Martin defends employment insurance surplus

Finance minister Paul Martin is having to defend charges that he's ripping off workers and business by maintaining a huge surplus in the Employment Insurance plan.

Ontario Premier Mike Harris raised the issue first, accusing the government of stealing from workers and business. His criticisms were repeated in Question Period Wednesday by Reform MPs, who are demanding a dramatic cut to premiums paid by business.

Bob White, the head of the Canadian Labour Congress, says the surplus has been created by slashing benefits to unemployed workers.

Statistics Canada reports the E.I. account has a surplus of $15.7 billion. A government actuary says Ottawa would need $10 to $15 billion to ride out the costs of a recession like the one in the early 1990s.

Martin has been using surplus E.I. money to pay down the deficit. He reduced the premium paid by employers from $2.90 to the current $2.70 per $100 earned.

Martin said Wednesday that he wants to maintain a surplus in the E.I. fund, as a cushion. He says the surplus is helping to lower taxes, balance the books and fund hospitals.

Government documents obtained by The Globe and Mail show that, if left unchecked, the accumulated surplus will reach $19.9 billion this year and $26.4 billion in 1999. Based on a gradual reduction to a $2 premium, the surplus would grow to $42.9 billion in 2003, the forecasts suggest.

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