Canada / Create the Employment Insurance Savings Account says the Canadian Taxpayers Federation

The Canadian Taxpayers Federation suggests that working Canadians be entitled to keep the $4,277 currently plundered from them and their employer every year in EI premiums, rather than sending the money to Ottawa, to be processed and shipped elsewhere.

Canadian workers should instead direct the money to their own Employment Insurance Savings Account (EISA). If they, their spouse or a family member lost their job, they could draw down the EISA account. This money could be invested in any RRSP eligible investment vehicle.

Upon retirement, the employee would transfer the balance of the EI Savings Account into their Registered Retirement Savings Plan and roll it into a Retirement Income Fund, a Tax-Free Savings Account, or into a Pooled Registered Pension Plan.

Facts about EI

• EI is divided into 58 Economic Regions, with different eligibility rules to collect EI in each one, leading to confusion and unfairness.
• The EI system treats individual Canadians very differently. A CTF calculation shows that the same person who made $16,200 over the last 26 weeks would be entitled to up to $16,830 in total benefits in some EI economic regions, but would receive no benefits whatsoever in others.
• Between 1981 and 2009, Ontario and the four western provinces contributed $113 billion more in EI premiums than they received in EI benefits. The figure for Ontario alone stands at $75 billion.
• Over the same period, the four Atlantic provinces and Quebec received $38 billion more in EI benefits than they paid in EI premiums, led by Newfoundland and Labrador at $14 billion alone.
• In certain regions of the country EI not only acts as assistance for the unemployed but is a major contributor to regional income. Between 2008 and 2010 in rural Newfoundland and Labrador and PEI, EI was the equivalent of 15 per cent of regional employment income. Compare this to the regions of Estevan, Saskatchewan and Wood Buffalo, Alberta, where EI is less than one per cent of employment income.
• During the same period, of all tax filers in Newfoundland and Labrador not including those collecting CPP, 62 per cent received EI benefits compared to 13 per cent in Alberta.
• An analysis of 162 census subdivisions in Canada found that the EI income per tax filer (not including recipients of CPP) ranged from a high of $7,258 in Bay Roberts, Newfoundland and Labrador to a low of $586 in Estevan, Saskatchewan.
• Beneficiaries who are frequent claimants of EI make up 62 and 60 per cent of all claimants in Newfoundland and Labrador and PEI respectively, but only 8 per cent in Alberta.
• The EI program is extremely inefficient with administration costs ringing in at $28 billion between 1993-94 and 2011-12 or $4 million every day. The admin costs take $400 a year out of the hands of a dual-income household.

Chosen excerpts by Job Market Monitor. Read the whole story at