Mind trap of the day - Macleans.ca
 

Mind trap of the day


 

From Question Period this afternoon.

Hon. John McCallum (Markham—Unionville, Lib.): Mr. Speaker, I have a question for the finance minister. Does the increase in employment insurance premiums beginning in 2011 constitute a tax increase, yes or no?

Mr. Ted Menzies (Parliamentary Secretary to the Minister of Finance, CPC): Mr. Speaker, the simple answer to that is no. Let me remind Canadians what happened to the notional surplus that was in the EI fund years ago. It is gone. Those people who paid into it never got it back. We provided an arm’s-length board to manage that, so that can never happen again.


 

Mind trap of the day

  1. Good on McCallum; he's dead on here. Too bad Menzies couldn't give an honest answer.

    • I had a sneaky suspicion that the Harper CONs had something against surplus budgets but this just proved it. Socialist-coalition bed hoppers in wolves' clothing!

  2. This makes my head hurt.

  3. Those people who paid into it never got it back? What on earth is he talking about? Hey, did they have a EI premium refund program and they didn't tell me?!?

  4. The notional respect and credibility of this government is long gone too.

  5. From page 6 of the 2008 Conservative Party Policy Declaration (pdf version accessed via their web site)

    "We believe that payroll taxes should not exceed the amount necessary to properly fund Employment
    Insurance because unnecessarily high payroll taxes are a tax on job creation. Lower payroll taxes
    encourage hiring and business expansion."

    So, it's a payroll tax then? I'm confused…

  6. From page 6 of the 2008 Conservative Party Policy Declaration (pdf version accessed via their web site)

    "We believe that payroll taxes should not exceed the amount necessary to properly fund Employment
    Insurance because unnecessarily high payroll taxes are a tax on job creation. Lower payroll taxes
    encourage hiring and business expansion."

    So, it's a payroll tax then? I'm confused…

  7. Arm's length?!? WTF With Pierre Poilievre involved, the phrase "iron grip" comes to mind. Jeebus!

  8. From page 6 of the 2008 Conservative Party Policy Declaration (pdf version accessed via their web site)

    "We believe that payroll taxes should not exceed the amount necessary to properly fund Employment
    Insurance because unnecessarily high payroll taxes are a tax on job creation. Lower payroll taxes
    encourage hiring and business expansion."

    So, it's a payroll tax then? I'm confused, because raising premiums isn't a tax increase. Help me out here, someone.

    • EI premiums are a payroll tax. If they aren't, what is?

      • You'd have to ask the Minister of Finance about that. I guess. It might depend on whether he was blowing smoke up the arses of the party faithful, or scrambling to keep the country solvent. I honestly don't know why the card carrying Conservatives don't read these guys the riot act.

  9. I find it odd that media owned by Canwest, Bell and Roger's all have disabled comments on the Jaf fer story with most burying it best they can.

    Except the CBC. While currently not having a public/private debate about the CRTC and fee for carriage charges, they still need to watch out for budget cuts…

    I'm not sure what the precedent is for cabinet minister's spouses being alleged of such things. And I don't think many people meet dealers of such substances who do not have ties to organized crime.

    Access to a Canadian cabinet minister (and most other highly placed party officials) on the one hand and a possible connection to organized crime on the other… libel chill or what!

    Interesting times.

    • Just a guess, but they don't have time to sort through potentially libelous comments all day? (Like yours.)

    • How does he get a fair trial if he's widely demonized ? — and he will be, you can count on it. A "no comments" policy is fine by me.

    • Is a no comments policy normal? What did they do when they ran the Bryant stories?

      • They left the comments open. I mused about that elsewhere today, but I think the admins are staying mum about their decisions on that sort of thing.

        • I thought the Globe closed comments on most Bryant stories. Not sure about CBC….

    • Of course one is innocent until proven guilty. What I don't get is the fact that possession of a narcotic is not a question of maybe. The peace officer found narcotics on his person, hence the charge. It's not like the office thought maybe there might be something in his pocket. The declaration of innocence and all that is standard practice in this type of situation. I just don't see how one would get off of a charge like this should it go to trial. I smell a plea deal.

    • Of course one is innocent until proven guilty. What I don't get is the fact that possession of a narcotic is not a question of maybe. The peace officer found narcotics on his person, hence the charge. It's not like the officer thought maybe there might be something in his pocket. The declaration of innocence and all that is standard practice in this type of situation. However I don't think the "It wasn't mine" defense works in this type of case. I just don't see how one would get off of a charge like this should it go to trial. I smell a plea deal.

      • Its a question of whether you or not you are ideologically committed to the notion of due process. Generally, the media is not. If there is widespread muting of commentary on the Jaffer case, that is shocking, but somehow I doubt that is really happening. That said, it wouldn't surprise me if the public content contributed to media outlets is being watched more closely because the chances of outrageous libel is much higher, so for strictly legal reasons, they may be watching those.

  10. The point, which some people here seem to have forgotten, is that the Liberals under Chretien and Martin moved over $50 billion dollars from the EI fund to general revenue funds, never to be returned. i.e. The Liberals used EI premiums not to fund EI, but as a general regressive income tax the working poor and lower middle class.

    • That's the idea. "Those people who paid into it never got it back" refers to the fact that the surplus EI benefits were not put to use (i.e. invested) to fund EI for the future (so, those who paid into EI never got it back in the sense that they paid into EI, but got, say, additional health care spending out of it, or national debt reduction, instead of more EI benefits).

      That said, a tax increase is a tax increase. If I'm paying 5% tax now, and have to pay 6% tomorrow, that's a tax increase. Menzies can explain it away all he likes, but It doesn't matter *why* the increase came about, it's still a tax increase.

      • Ah, thanks I understand now. And your point is well taken that instead of funding EI for future employees, those that paid into the fund to surplus got at least something out of it. If you need more money in your "rent" or "groceries" envelope, but you can't take from your "childcare" envelope, the only other alternatives are to either raise the revenue that flows into these envelopes or take out a loan to cover the shortfall. In other words, the people that paid into EI would also have to pay additional taxes, or pay interest every year on that debt. I'm fairly sure the people that paid into EI liked the way it played out.

  11. The Libs balanced their budget with theft from EI and cutting transfers to the provinces. Those are the facts.

    McCallum knew exactly what Menzies was talking about. The Liberals committed greater crimes than their brown bags in restaurants.

    • Oh yes, I don't deny that the Liberals stole from the EI account. If I remember rightly, they also lowered the EI premiums. But the alternative would have been worse for those who had paid the too-high premiums, since those individuals would never see their money back, and would have had to pay higher taxes, or higher interest on the debt. Those coming along now to collect EI can hardly complain that the money paid by workers who are now retired is no longer there. Well, they can if they are prepared to pay EI premiums for those who come along behind them.

      • I think stole is a strong word, but otherwise I think your post is spot on. If there was an EI surplus and a deficit elsewhere, it seems stupid NOT to use the money.

    • Why do you call it theft?

      You don't see the difference between moving an EI surplus and the brown bags of cash in restaurants?

      • I see the difference. One puts you in jail, the other gets you feted as a deficit-slayer. But both are crimes.

        The Lib gov't stole money paid into an insurance plan and used it as general revenue — you can justify it all you want but they did it for their own political benefit. Menzies is rubbing McCallum's face in Lib dogdoo.

        • I'm not trying to justify the transfer of funds at all. I suppose that a more 'proper' approach would have been to refund the EI surplus to premium payers, and then raise taxes to fight the deficit. Similar net financial effect from the governent's point of view, with a lot more complaining; I can see why they didn't pick that approach. Equivalent techniques from my perspective. In fact, the transfer has the benefit of automatically being a one time event.

          You and others can call that transfer a few things, such as against the spirit of the orignal EI legislation, or a crass political move to appear to be deficit slayers without actually doing anything, but I don't see your justification for calling it a crime. Or are you saying that without the EI surplus subsequent payments to eligible workers had to be curtailed? That would be approaching a criminal transgression.

          And what is gained by Menzies rubbing MacCallum's face in dogdoo?

  12. What is the rationale for increasing the premiums? Is this driven by a formula of some sort that is nominally meant to keep the EI fund at some reserve level, or is this a 'surprise' move that relevant experts say is unnecessary? If this increase causes the EI fund value to increase a lot will the excess be available to shift over to general revenue again at some future date?

    And what's up with this often repeated complaint that "I've paid into EI for X years and I've never gotten anything out of it!!" It's an insurance plan (granted it has some income redistribution characteristics). Most people are going to put more in than they ever get out, and quite a few will never, ever receive any benefits at all; that's not such a bad thing, since it means you have never lost your job.

    • Well put. We forget sometimes that "being insured" is the service one receives for the payments.

      One small quibble though: there are many part time workers forced to pay in, even though they could never meet the eligibility standards to receive payments. For those workers, it's fair to claim they pay in a get nothing.

    • Well put. We forget sometimes that "being insured" is the service one receives for the payments.

      One small quibble though: there are many part time workers forced to pay in, even though they could never meet the eligibility standards to receive payments. For those workers, it's fair to claim they pay in and get nothing.

      • It never occurred to me that some workers make payments even when it is clear that the job won't allow them to qualify for benefits. Do you have any knowledge about how prevalent that is? Is the total amount of money significant from the overall EI plan perspective? Perhaps some type of rebate is in order.

        • This article gives a reasonable overview of things from the part-time angle:

          http://www.rabble.ca/news/2009/07/mind-gap-fixing

          I have no idea how much the system depends on the premiums from those who can never collect (and their employers), but I'm betting it's substantial.

          The logic of this is probably that excusing part-time employees from the plan outright would dissuade employers from creating full time jobs. Or possibly, it's a holdover from when part time jobs were the domain of students and 'housewives' and thus not given much attention.

          It would certainly make for an interesting class action suit. Because I'm pretty sure it's illegal to extort money under the guise of a premium for insurance, when the individual has no chance to collect.

  13. In the "There aughta be a law" department…..it should be illegal to provide an answer to any question that ends with "Yes or no."

  14. In the "There oughta be a law" department…..it should be illegal to provide an answer to any question that ends with "Yes or no."

    • Take it or leave it.

    • Agreed. Take it or leave it.