The non conformer's Canadian Weblog

December 12, 2008

Canada’s ex PM Jean Chretien, Paul Martin Found Guilty

 
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Canadian Press  OTTAWA – The Supreme Court of Canada says the federal government broke the law in financing the employment insurance system by transforming premiums paid by workers and employers into an unconstitutional tax.  In a 7-0 judgment, the court ruled Thursday the former Liberal governments of Jean Chretien and Paul Martin collected EI contributions illegally in 2002, 2003 and 2005.  In those years, EI rates were set directly by cabinet without proper authorization from Parliament, violating the ancient constitutional principle of no taxation without representation.  However, the court said Ottawa legitimately collected premiums in all other years since 1996 and rejected claims by organized labour that the Liberals deliberately ran up massive surpluses in the EI fund, then diverted the money to balance the federal budget and fund other initiatives.  The Confederation des Syndicats Nationaux, one of Quebec’s leading labour organizations, had demanded that $54 billion in allegedly diverted premiums be returned to the EI system and used to fund future benefits to jobless workers.  The court issued no order for repayment and suspended the effect of its judgment for one year in order to give the federal government time to sort out the legislative tangle.http://ca.news.yahoo.com/s/capress/081211/national/scoc_ei_surplus

Critics have long maintained the strategy of Jean Chretien and Paul Martin  amounted to balancing the federal books on the backs of the unemployed.  The Liberals brought in legislation in 1996 that tightened eligibility rules for EI benefits but simultaneously opened the door to new training, education, placement and other programs.  Critics say the government then went on to set the premiums charged to workers and employers at higher rates than were necessary to fund the reduced benefits and new programs.  The result was a ballooning surplus in the EI fund – a revenue windfall critics said could be used first to balance the budget and later to support other Liberal initiatives that had no connection to EI. 

 

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