50 Elizabeth II, A.D. 2001, Canada

Journals of the Senate

1st Session, 37th Parliament

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Issue 32 - Appendix "B"

Thursday, May 3, 2001
1:30 p.m.

The Honourable Daniel Hays, Speaker

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APPENDIX
To the Fifth Report of the Standing Committee on Social Affairs, Science and Technology

Bill C-2, An Act to amend the Employment Insurance Act and the Employment Insurance (Fishing) Regulations

Observations

Based on our hearings, it is quite apparent that a serious concern exists with respect to the government's proposal to remove the responsibility from the Canada Employment Insurance Commission to set the premium rate in the years 2002 and 2003. This proposal would circumvent the premium rate-setting objectives outlined in section 66 of the Employment Insurance Act which require the premium rate to be set annually so as to ensure that there is enough revenue over a business cycle to cover the costs of Employment Insurance and to ensure that the premium rate is relatively stable over the same period. Our witnesses objected strongly to clause 9 of the bill and supported the continued role of the Canada Employment Insurance Commission in setting the premium rate for the years 2002 and 2003.

Our witnesses reminded us of the size of the "reserve" in the Employment Insurance Account which exceeded $35 billion at the end of 2000-01. This is well above twice that estimated by the Chief Actuary of Employment Insurance to achieve the premium rate-setting objectives under the act.

While the Committee fully acknowledges that the "reserve" in the Employment Insurance Account is a notional one, the Committee believes that the size of the reserve today - and it follows the premium rate - is excessive in terms of that required to satisfy the intent of the act. Ms. Sheila Fraser, the Interim Auditor General of Canada, told the Committee "[i]n the meantime, the balance of the EI Account has continued to grow. It is likely to exceed $35 billion at the end of March 2001. At that level, as Mr. Desautels has already mentioned, we would be hard pressed to conclude that the intent of the law has been respected." It is for this reason the Committee strongly suggests that in setting the premium rate for the years 2002 and 2003 that the government move now to establish a revenue neutral premium rate, as estimated by the Chief Actuary of Employment Insurance.

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