Criminal complaint against Harper over huge EI surplus

After accusing Liberals of using Employment Insurance fund as a 'partisan piggy bank', Harper Conservatives are now doing the same thing.


Ottawa (9 March 2007) - A criminal complaint has been filed against Prime Minister Stephen Harper and his Conservative cabinet for misusing the now-staggering $51-billion surplus in Canada's national Employment Insurance (EI) fund.

The surplus, which the Conservatives howled that the Liberals were abusing when they were in office, has mushroomed by $7 billion since 2004 and continues to grow at a spectacular rate - fed by ongoing worker contributions and interest gains.

Yet the Tories are behaving the same as the Liberals behaved, putting the surplus into general revenue where it can be used for anything and not specifically for the benefit of unemployed workers as the law requires.

The RCMP has confirmed that the complaint was lodged March 7 by a lawyer representing the Retail, Wholesale and Department Store Union (RWDSU).

Larry Kowalchuk said on behalf of the union in Regina that he took the action in response to long-standing concerns that surplus EI funds are being diverted to uses other than providing unemployment benefits.

Denounced by Auditor General

Sheila Fraser, the federal auditor general, denounced the former Liberal government repeatedly for running EI surpluses beyond what was needed to meet payments to the unemployed, even during the most difficult economic times. Federal officials say the outside limit for this purpose would be a maximum surplus of about $15 billion.

Despite accusing Liberals of using the fund as a "partisan piggy bank," the Conservatives are now controlling a much bigger EI surplus as they embark on an unprecedented multi-billion-dollar spending spree in preparation for an election.

It is widely expected that Harper, who is currently leading the Liberals in opinion polls, will find a way to precipitate Canada's third federal election in three years sometime this spring.

"There have been a lot of media talk shows about what the government should be doing with the $51-billion surplus," Kowalchuk told the Regina Leader-Post.

"I was listening to that and going: 'Well you can't do anything about it, it's a trust. It belongs to the workers and government can't spend it on health care or anything else. If they do it is a breach of trust.'"

Criminal Code Section 336

Kowalchuk said Section 336 of the Criminal Code makes it an indictable offence for "every one who, being a trustee of anything for the use or benefit, whether in whole or in part, of another person, or for a public or charitable purpose, converts, with intent to defraud and in contravention of his trust, that thing or any part of it to a use that is not authorized by the trust is guilty of an indictable offence and liable to imprisonment for a term not exceeding 14 years."

He said the union is not making any specific allegations about particular federal programs or initiatives that may be benefitting from EI money.

Instead, the union is asking the RCMP to investigate the general handling of the fund in relation to Criminal Code restrictions. If the $51 billion is not in a trust account, to be used solely for providing unemployment benefits, the union wants to know where it is and what it was used for, Kowalchuk said.

NUPGE intervention

The National Union of Public and General Employees (NUPGE) has been calling for years for Ottawa to use the fund as intended to benefit workers who are in between jobs.

In 2001, when the surplus stood at $36 billion, NUPGE president James Clancy wrote to former prime minister Jean Chretien urging him to make major changes in the operation of the fund.

Specifically, he called on the government to pay EI recipients a minimum of 66% of average earnings and to restore the maximum benefit period to 50 weeks. He also proposed better integration of federal and provincial training programs to help EI recipients get back into the labour force and called for abolition of provisions penalizing short-term and seasonal workers.

Recipients are now required to work 420 to 700 hours, depending on local unemployment rates, to qualify for benefits. It has been estimated that 17% of workers who pay into the program never qualify because of the limited hours are they are able to work. NUPGE

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