Not any more

EI board cost taxpayers $130,00, even though advice ignored

In Canada on October 3, 2010 at 10:17

OTTAWA — Taxpayers have forked out nearly $130,000 to finance an independent board created by the Conservatives to advise the federal government on employment insurance rates. So far, though, the only piece of advice it has offered has been rejected.

Actually, the board wasn’t called on until this year, largely because the Harper government froze EI premiums as part of its two-year economic action plan to combat the recession.

The freeze ends Jan. 1, however, so the board kicked into gear earlier this year and by late summer recommended rates be raised by the maximum amount allowed under the law — 15 cents per $100 of insurable earnings for workers and 21 cents for employers.

The board figured the hefty increases were needed to start putting the deficit-ridden EI account back into the black, which is its mandate.

The government had a different view in light of the sputtering economic recovery and the stubbornly high jobless rate.

Finance Minster Jim Flaherty announced Thursday that cabinet had used its override powers to cut the recommended increase by two-thirds.

On Jan. 1, he said, EI premiums will go up by five cents and seven cents per $100 of insurable earnings for workers and their bosses, respectively.

Mr. Flaherty also announced the government would soon launch consultations with business, labour and other interested groups on how to address the challenge of bringing down the EI deficit accumulated in the past two years because of increased demand for regular and extended EI benefits.

As it stands now, the Canada Employment Insurance Financing Board is responsible for ensuring premium rates are set at a level that is just sufficient to cover the cost of benefits received.

Although the board, a Crown corporation, was created in legislation in 2008, it did not become operational until the beginning of this year.

The board’s first financial report, released Friday, says that by March 31 of this year, spending had reached $129,264.

The tally included compensation of $64,861 for the seven board members, $38,087 in consulting services, $25,000 for board meetings, $8,607 in office supplies and maintenance and $140 in interest and bank charges.

David Brown, the board chairman, says in the report that, given the impact of the economic downturn in 2008, a surplus in the EI operating account is not expected for several years.

Mr. Flaherty has already said premiums will climb next year by 10 cents.

As always..Thank Harper

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