[vid]

EI surplus balloons to $51 billion
Last Updated: Thursday, February 22, 2007 | 3:37 PM ET | CBC News
http://www.cbc.ca/money/story/2007/02/22/eisurplus.html

The surplus in the employment insurance fund has grown to $51 billion, according to briefing notes done for Human Resources Minister Monte Solberg.

The notes were released under Access to Information, according to published reports on Thursday.

A Human Resources Department spokesperson confirmed that the fund grew by $2.2 billion in the government's 2005-06 fiscal year. That included $800 million in excess premiums and $1.4 billion in interest.

In 2004, the surplus stood at $44 billion.

The Conservatives regularly criticized the Liberals when they were in office over the size of the EI surplus.

However, now that they are in power, the Conservatives have not offered any plans on what they are going to do with the massive surplus.

EI premiums fell on Jan. 1 by seven cents to $1.80 per $100 in insurable earnings. The premiums are now set at a maximum of $720 annually. The employer rate was cut by 10 cents to $2.52 per $100.

The Canadian Taxpayers Federation, long a critic of the size of the surplus, said both individual and employer premiums should be set at $1.59 to help spur job creation.

With Ottawa taking in more in premiums and interest than it pays out, the excess money from EI has gone in the federal government's main piggyback for use for other purposes, be that new spending or tax breaks.

"The EI system is being used as a tax grab by the federal government to spend more money elsewhere," said Canadian Taxpayers Federation federal director John Williamson. "It should operate more as an insurance program, and not be used as a revenue generator by the government."

Finn Poschmann of the C.D. Howe Institute called the large surplus a "10-year trainwreck" but pointed out that there is no slush fund sitting around waiting to be spent, as successive governments have used the EI surplus to balance their books.

Poschmann said the $51 billion figure dates back to March 2006 and he estimated that the fund has now grown closer to $53 billion thanks to strong employment growth.

"The money is still rolling in," he said.

With files from the Canadian Press

Remember when it was Unemployment Insurance? :) "You don't need to hire me! I have Unemployment Insurance!"

[malek]

The Conservatives regularly criticized the Liberals when they were in office over the size of the EI surplus

The Bloc were hammering this shit issue much earlier than the cons. but we got the answer from Martin. There's no surpluses! The money was diverted to the general federal funds...

one could say one plus one equal two and thats how we got huge surpluses and paid some debt.

[big W]

It is how we got our surpluses and continue to get surplues on the federal level. I really don't care if there is an EI surplus or not since at the end of the day the government needs to generate the funds from somewhere. Say we cut the EI payments, then we would have to increase income and corporate taxes to make up the lost revenue of go back to large deficits. The current situation of surpluses and debt repayment is better.

[CC420]

:previous: Surpluses are bad government policy. Anyone who understands proper government financing would know governments are supposed to continually roll out balanced budgets but never defecits or supluses. Those surpluses come from our back pockets and if we were to get that money back in the from of taax breaks or lower EI payments then that money would go to either savings or spent on the economy. Both are good and healthy for the economy.

Paying off the debt is simply BS that will never be acomplished under our current money making system. No attempt should be made to pay off the debt until it is done right. Give us hard working Candians a tax break.

[vid]

"No attempt should be made to pay off the debt until it is done right."

Yeah, that's sound fiscal policy! :crazy:

[malek]

vid, go learn on the subject.

Debt payment is absolutely useless and irresponsible.

Did you know that after WW2, the debt to GDP ratio was 100% in Canada?

Not a single penny went to debt reduction till the 90s and that debt ratio was down because of our economic performance.

Cutting (or not investing) on roads, health, rnd and education to pay the debt only jeopardize future generations and futur economic prosperity.

[Xelebes]

:previous: Surpluses are bad government policy. Anyone who understands proper government financing would know governments are supposed to continually roll out balanced budgets but never defecits or supluses. Those surpluses come from our back pockets and if we were to get that money back in the from of taax breaks or lower EI payments then that money would go to either savings or spent on the economy. Both are good and healthy for the economy.

Paying off the debt is simply BS that will never be acomplished under our current money making system. No attempt should be made to pay off the debt until it is done right. Give us hard working Candians a tax break.

We should take the opportunity of this boom to reduce our debt as much as possible. I'd hate to think of the interest making our debt go to a trillion dollars and more.

[zerokarma]

No attempt should be made to pay off the debt until it is done right.

You are a moron

[tradlak]

THis conservative regime is so misguided on many points. Flaherty does not believe there is a municipal fiscal imbalance even though one of the world's wealthiest city regions Toronto has a $1 billion deficit - I wonder how Mumbay is doing - not to mention the many other Canadian cities that operate in a deficit. Secondly, debt repayment is so short-sighted if you consider the improved economic performance and environmental conditions if we were to invest in cities from Victoria, Toronto to Halifax in transit and infrastructure repair. The wealth generated would help pay down debt.

A small portion of that EI surplus evenly distributed amongst Canadian cities would generate a multiplier far larger than the amount invested.

One more Conservative blooper for you, John Tory said at the Toronto City Summit Alliance that healthy rural municipalities are the basis for healthy cities like Toronto and Montreal. Is he living in the middle ages or what? Montreal does not generate its wealth from turnip production does it?

It seems like all fundamentalist conservatives he's trying to square accepted economic thinking with the traditional conservative rural voter base.

[1ajs]

ehh the lybrals paying down the debt... look at our econimy.. the dallor colaped then it started to climb back up... till the conservitives got in its been slowly going down.......... the less debt we have to pay the more money we have to play with... what is the federal debt at?

[malek]

One more Conservative blooper for you, John Tory said at the Toronto City Summit Alliance that healthy rural municipalities are the basis for healthy cities like Toronto and Montreal. Is he living in the middle ages or what? Montreal does not generate its wealth from turnip production does it?



:rolleyes: omg was he high on acid?

the city proper of Montreal doesn't touch a single penny of taxation income on agricultural lands because there's none of it!

Thats why I'm convinced that its to the provinces to find a solution and no the federal, and this starts by leaving taxations points to the provinces for them to fullfill their own agendas.

[malek]

ehh the lybrals paying down the debt... look at our econimy.. the dallor colaped then it started to climb back up... till the conservitives got in its been slowly going down.......... the less debt we have to pay the more money we have to play with... what is the federal debt at?


the dollar isn't up because of debt payment, its because of high barrel prices, other resources high demand and prices and favorable economic prospects in general. Paying down the debt doesn't necessarly bring the canadian dollar up.

[tradlak]

I completely agree with you Malek. Many more tax points to provinces and municipalities who have a better understanding of local issues. The redneck conservatives just don't like cities, culture and all that diversity and transit crap no how!

[1ajs]

the dollar isn't up because of debt payment, its because of high barrel prices, other resources high demand and prices and favorable economic prospects in general. Paying down the debt doesn't necessarly bring the canadian dollar up.


look at the us they have taken on trilion i n debt since bush got in to fight a war and they are tanking now... debt is not a good thing at all

[lubicon]

One more Conservative blooper for you, John Tory said at the Toronto City Summit Alliance that healthy rural municipalities are the basis for healthy cities like Toronto and Montreal. Is he living in the middle ages or what? Montreal does not generate its wealth from turnip production does it? .

Since a larger portion of Canada's wealth is from natural resources (forestry, agriculture, mining, petroleum etc), and since these resources are taken from rural areas there may be some basis to his argument. The major cities benefit immensely from these resources as the high paying office jobs (head office, services etc) tend to be in the larger cities and the taxes the companies pay benefit the people living in the cites as well in the form of government services that the money is spent on.

[tradlak]

I see your point. This would apply to Edmonton and Calgary for sure. You certainly need road infrastucture to extract resources, but cities multiply this wealth many times over and the infrastructure needed for cities to generate wealth is of a higher order. This issue here is that we are ignoring cities in Canada like no other first world country (even more than US now).

[Canadian Mind]

No attempt should be made to pay off the debt until it is done right

If you can explain how to pay off the debt right, I will refrain from calling you an idiot.

Think of it this way, credit card debt... It'll keep growing if you don't do something about it while trying to come up with the "right" way to pay it off. Even if your putting just enough in to keep it from going up, you keeping yourself in a good position to have to pay off less in the future (Inflation for the win).

Same thing goes with national debt. If we put in just enough to keep it level, it will cost us far less in the future when 500 billion is pennies compared to what money is worth right now. If we can reduce this number now, even better. I'd rather pay 300 billion in pennies ten years from now over 500 billion in pennies.

[Mister F]

Since a larger portion of Canada's wealth is from natural resources (forestry, agriculture, mining, petroleum etc), and since these resources are taken from rural areas there may be some basis to his argument. The major cities benefit immensely from these resources as the high paying office jobs (head office, services etc) tend to be in the larger cities and the taxes the companies pay benefit the people living in the cites as well in the form of government services that the money is spent on.
In Ontario the primary sector (natural resources) accounts for a grand total of 2% of the province's GDP. I don't know about other provinces, but natural resources don't play as big a part as most people think.

[e909]

I wouldn't be so quick to call not paying off the debt stupid. It really depends on opportunity cost. If the money could be better spent in other ways, it should be.

[Canadian Mind]

I wouldn't be so quick to call not paying off the debt stupid. It really depends on opportunity cost. If the money could be better spent in other ways, it should be.

Kinda why I said I would recall calling buddy an idiot if he could provide a logical explination.

[CC420]

Woah! :shrug: Did I offend someone by stating the obvious?

You are a moron

This was one intellectual :rolleyes: response on, what I must admit was a grose simplification on the debt issue. Then I get more possible name calling with this slightly ammusing jab.

If you can explain how to pay off the debt right, I will refrain from calling you an idiot.

Think of it this way, credit card debt... It'll keep growing if you don't do something about it while trying to come up with the "right" way to pay it off. Even if your putting just enough in to keep it from going up, you keeping yourself in a good position to have to pay off less in the future (Inflation for the win).

Same thing goes with national debt. If we put in just enough to keep it level, it will cost us far less in the future when 500 billion is pennies compared to what money is worth right now. If we can reduce this number now, even better. I'd rather pay 300 billion in pennies ten years from now over 500 billion in pennies.


It seems my point was missed by a few. I know if you're deep in debt you need to get out fast. Unfortunately, most people or corporations that get into debt have to soon face the facts and file for bankruptcy. This allows them to get that helping hand, pulling them to financial security from the deep hole they cannot dig out of. The government cannot do this though, because of the obvious economic implications.

Now when I say no attempt should be made to pay off the debt until it is done right. I mean why try to pay off a debt to the very people who continue to lend you money. It's useless. Right now our government creates the nations money by burrowing it from chartered banks at the going rate. It ignores the Central Bank of Canada's power to create money at near interest free levels. This funny money making business has been going on for a bout as long as we have been trying to pay down the debt. Go figure. :rolleyes: If we went back to the sensible way of money creation I would be all for paying down the debt. Until that time comes I am completely against paying the banks my hard earned dollars. They have enough money.

[tradlak]

Is it smart to not let your kids go to university, because you have to pay off your mortgage faster; does it make sense to let your neighbour die in the emergency ward, so you can pay off your mortgage; should you go spend an extra 2 hours commuting everyday, so as to pay off your debt.

The point is we have to invest strategically. Cities are the wealth generators and if you don't invest in them, eventually your ability to repay debt and prosper will be diminished.

[SD]

I think debt repayment is a good idea...but I think infrastructure investment is just as important.

The goverment has the money to do both but it's hard to imagine this government providing any substantial investments into cities, etc.

[habsfan]

The goverment has the money to do both but it's hard to imagine this government providing any substantial investments into cities, etc.

Too bad, i just can't imagine someone saying that cities(especially in Canada) aren't primary engines that run the country!

[murman]

Is it smart to not let your kids go to university, because you have to pay off your mortgage faster; does it make sense to let your neighbour die in the emergency ward, so you can pay off your mortgage; should you go spend an extra 2 hours commuting everyday, so as to pay off your debt.

The point is we have to invest strategically. Cities are the wealth generators and if you don't invest in them, eventually your ability to repay debt and prosper will be diminished.

1) it's your kid's debt, and your neighbour's also. Don't pay it off, and you are also mortgaging the future of generations after you.

2) the sooner you stop paying interest on the debt, the more $$$ you'll have to stuff into more social programs.

Seem's like a slam-dunk to me.

[malek]

by that time, our economy will be relegated to third world status.

and about the dollar going up, its actually the US dollar that wen up, if you compare the C$ against other major currencies it hasn't really changed.

[1ajs]

it went up against the euro a bit and the pound!!!

i stoped paying atention to the us dallor the euro is the new green back....

[Canadian Mind]

Woah! :shrug: Did I offend someone by stating the obvious?



This was one intellectual :rolleyes: response on, what I must admit was a grose simplification on the debt issue. Then I get more possible name calling with this slightly ammusing jab.



It seems my point was missed by a few. I know if you're deep in debt you need to get out fast. Unfortunately, most people or corporations that get into debt have to soon face the facts and file for bankruptcy. This allows them to get that helping hand, pulling them to financial security from the deep hole they cannot dig out of. The government cannot do this though, because of the obvious economic implications.

Now when I say no attempt should be made to pay off the debt until it is done right. I mean why try to pay off a debt to the very people who continue to lend you money. It's useless. Right now our government creates the nations money by burrowing it from chartered banks at the going rate. It ignores the Central Bank of Canada's power to create money at near interest free levels. This funny money making business has been going on for a bout as long as we have been trying to pay down the debt. Go figure. :rolleyes: If we went back to the sensible way of money creation I would be all for paying down the debt. Until that time comes I am completely against paying the banks my hard earned dollars. They have enough money.

Even if we do start creating money via the central bank once again (isn't this what Canadian Action Party wants to do?), we will still be in debt to the folks who charge us ridiculous rates. Might as well kill the debt and borrow from the central bank at the same time eh?

I don't see how not paying off the debt and letting the interest build is helping us in anyway.

Also, is we were to take this 25 billion, put half to infrastructure, and give the other half to cities, including a disproportionate amount for our northern "cities," what kind of a position would we be in? Good or bad? What are the pros and cons of this idea?

[chuber]

I wonder how much personal debt CC420 is carrying? :P

[CC420]

Even if we do start creating money via the central bank once again (isn't this what Canadian Action Party wants to do?), we will still be in debt to the folks who charge us ridiculous rates. Might as well kill the debt and borrow from the central bank at the same time eh?


You clearly don't understand the business of the central bank which was created in 1934 and for the good became a crown corp. in 1938. Before that we used the bank of montreal to print our money because we followed a national banking system. Anyways, to spare me getting into the history of banks I will explain how money should be created through the central bank.

When the central bank creates money it does lend it to the government at a nominal, not market fee. So the government is already in better shape to pay off the debt because it is getting its money at a better interest rate than the market rate. But since the government of Canada owns the central bank it recieves divedends effectively making the money created interest free. So no, we would not go into debt to create money if we used the central banking system the way it should be used. Thus we could start to pay off the debt properly by using real money and not this lent out BS.

I should also note, I did not mention earlier that banks in Canada no longer need to keep reserves. That's right, thanks to Mr. Mulroney the banks can lend 100% of their reserves out. Think about, they create our money, without having any reserves to back up those notes. Yet we try to pay off the debt with what really is useless paper. This is how the banks have us by the balls and why I am against this corrupt scam of paying off the debt. There is no such thing going on and the only thing happening is our money is going to bankers so they can get even more rich.

I understand you're point that staying in debt is unsound fiscally. But all I am saying is it cannot be done under our current model. We have to reverse the 0% reserve law set out by Mr. Mulroney and the act of 95% of our money created from chartered banks thanks to Mr. Martin, has got to be stopped.

Do you get it now?

I am all for paying off the debt when it is actually feasible. Our current system does not allow this to happen

isn't this what Canadian Action Party wants to do?),

Yes it is part of their platform. Unfortunately I disagree with pretty much the rest of their platform so they will never get my vote.

[CC420]

I wonder how much personal debt CC420 is carrying?


:haha: :laugh: :rolleyes: I am in no debt whatsoever. Im 22, I currently rent, carry no credit card and simply live from paycheck to paycheck. It is impossible for me to go into debt. :tup: One day I'll have to bight the bullet and get into the game of credit, but until then the banks can kiss my Canadian ass.

It's funny when I try and tell people this type of stuff. They seem to get offended and get quite angry with me. Should I keep my head in the sand and continue to take it up the behind? Screw that.