NDP REVEALS HARPER’S MASSIVE PAYROLL TAX INCREASE: Conservatives using the E. I. system to gouge Canadians

July 15, 2009

NDP REVEALS HARPER’S MASSIVE PAYROLL TAX INCREASE: Conservatives using the E. I. system to gouge Canadians

WINDSOR (ON)- Today, the NDP exposed the Harper government’s impending $10.5 billion payroll tax hike on Canadians in this recessionary economy.

“It is outrageous that workers and small businesses are now forced to bail the government out of bad decision making. Canadians are owed $ 55 billion by this government from the E. I. surplus,” Masse stated. “Yet this government refuses to use this money to pay for E. I. premium freezes and instead engages in this egregious tax gouging.”

In 2008, the Conservatives created the Canada Employment Insurance Financing Board (CEIFB) to oversee its new Employment Insurance account. Despite a surplus in the old EI account of about $57 billion at that time, the government endowed the new account with a mere $2 billion instead of the $10-15 billion that the Auditor General estimated is needed to balance the EI account in recessionary times . The CEIFB sets EI premium rates to ensure EI revenues and expenditures break even over time.

As part of its “stimulus” measures, the government announced in Budget 2009 a freeze on EI premiums for 2009 and 2010 estimating its cost as $4.5 billion. By the time of the June report card, that number became $10.5 billion. The Budget makes clear the CEIFB will take steps in 2011 to recover the cost of the premium freeze by setting premiums appropriately with a significant tax increase.

“The government needs to ensure the viability of the fund by fulfilling the requirements independent actuaries and the Auditor General (AG) have called for to cover the business cycle,” Mulcair stated. “The government’s lack of accuracy and veracity when it comes to the economy and the country’s fiscal position has been the only consistency of the Harper Conservatives.”

The Parliamentary Budget Office in its recent 5 year economic and fiscal assessment predicts the E. I. account, even with these payroll tax increases, will still be in deficit beyond 2014.

“The government must commit to use the E. I. surplus, as mandated by the AG, completely before any E. I. payroll tax increases are even considered,” Comartin stated.