Vancouver Sun: Liberals should rethink stealth tax on good drivers

March 10, 2010

Vancouver Sun Editorial

For more than a decade, the federal government set employment insurance premiums for workers and employees well above what was needed to cover benefits.

By the time the recession hit, this stealth tax raised about $57 billion, roughly half of all of the budget surplus that the government was using to pay down the national debt during the good years. When the world economy took a dive, people losing their jobs pushed the cost of benefits above the level of premiums being paid by people still working.

If the EI had been run as a true insurance system, that would have been no problem. The losses now would be covered by the surpluses. But EI doesn’t have a fund of its own. Premiums and benefits flow in and out of general government revenues.

So now that the "fund’ is being run at a loss, Ottawa gave notice in the federal budget last week that it is hiking premiums to cover costs.

We’ve known about the EI stealth tax for years. What we didn’t know is that the provincial government in British Columbia was getting ready to bring in a stealth tax of its own.

A tax so stealthy, in fact, that we only learned about it after the Canadian Office and Professional Employees Union, which represents ICBC employees, pointed out the meaning of a somewhat obscure passage in the budget.

Read the rest of the story here…