THE BLOG

Canadian Taxpayers Federation Gets it Wrong

11/21/2013 12:37 EST | Updated 01/25/2014 04:01 EST

The Canadian Taxpayers Federation is supposedly a "not-for-profit citizen's group dedicated to lower taxes, less waste and accountable government." It seems now they are also going after insurance policies purchased by workers for unknown employment perils beyond their control and the system Canada has developed to train a workforce.

An insurance policy is not a tax -- for the purposes of this discussion Service Canada says "The Employment Insurance Act sets up an insurance scheme under which the beneficiaries are protected against the loss of income resulting from unemployment. The purpose of the scheme is obviously to compensate unemployed persons for a loss; it is not to pay benefits to those who have not suffered any loss."

Their report "Unmasking Employment Insurance, How EI Increases Unemployment and Steals Billions from Working Canadians" is almost not worth mentioning. However, to understand their logic and then measure the weight policy makers should assign to this piece, let's look at other insurance systems in place in Canada.

What about a vehicle insurance savings accounts? Instead of buying policies to protect from unknown perils beyond our control on the road we all save our premiums in case of an accident? The average car insurance premium in Ontario is $1,200 per year. So, with safe driving for 20 years your family amasses a nest egg of $24,000. If you get into an accident and there are personal injuries, the other party sues you and you can always just sign over your home to cover the liability! It better be a fender bender if you follow the logic of the CTF. Has anyone at the CTF ever been to a body shop?

What about health insurance savings accounts? Instead of paying into provincial health insurance schemes how about we all just bank some money to save for when we get sick? According to the Fraser Institute and the Canadian Institute for Health Information the cost of health insurance per Canadian is on average $3,660 per year based on a $128 billion spent by the Federal Government each year. Hope you don't have a heart attack because your savings account wouldn't cover the care. Hope you don't need treatment for leukemia or an angioplasty to remove plaque from an artery at a cost of $21,000 USD. What then, CTF?

The report is also silent on training, and helping people return to the workforce. Not all of the EI funds collected by the Government of Canada are paid out in benefit dollars. A large percentage gets redirected to training programs across this country to assist unemployed workers back into the labour market. Apprenticeship training is funded out of Part II EI dollars.

The federal government under the leadership of Prime Minister Harper and Minister Jason Kenney is attempting to reform this system to get value for money for Canadians through the Canada Job Grant. If the CTF were serious about reforming the system (and not largely anti-training of employees) they would stand up and support these measures.

Does the CTF truly believe our unemployment savings account could fund training we need to get back into the workforce after a loss of employment through no fault of our own? The EI system isn't perfect. The EI system could use reform. The current Federal government has made a number of changes and is tweaking the system. Thankfully the CTF is not in charge and has just proven their policy scope is about as deep as their report's executive summary is thick.

Perhaps the CTF would go after real tax cuts for Canadians -- I'm sure members and non-members alike (of the CTF) would appreciate if the marginal rates went down for all income brackets. In the interim, CTF, stick to your knitting.