FOR IMMEDIATE RELEASE: September 30, 1998

CALGARY – Federal Finance Minister Paul Martin should avoid the temptation to use surplus dollars from the Employment Insurance fund to pay for tax cuts or spending increases, say union leaders from around the province.

At a meeting of the Alberta Federation of Labour’s Executive Council yesterday, representatives from more than 15 unions condemned the federal government’s practice of diverting surpluses from the EI fund into the government’s general revenue fund.

"Money in the EI fund has been collected specifically for the purpose of providing income to unemployed Canadians while they look for new jobs," said AFL President Audrey Cormack. "That money has been collected to help the unemployed. We believe it should be used for that purpose – and that purpose alone."

The unions also took issue with spokesmen from the Reform party and the Canadian Taxpayers Federation who have been calling for substantial cuts to EI premiums.

"Once again, the Reform party and the Taxpayers Federation have things mixed up," says Cormack. "They say the surplus shows that premium are too high. But the surplus isn’t really the result of high premiums, it’s the result of the brutal cuts to unemployment benefits imposed by the federal government over the past two years. The government is still taking the money in, but they’re not paying it out to people who need it – that’s why there’s such a large surplus."

Cormack says the truth about the origin of the EI surplus was revealed in a report released by the federal Human Resource Development department this summer. The report showed that only 40 per cent of unemployed Canadians currently qualify for EI benefits – down from 62 per cent in 1994 and 87 per cent in 1990.

"The so-called ‘reforms’ of 1996 have been a disaster for thousands and thousands of Canadians. It is now much more difficult to qualify for unemployment benefits. And even if you do, the benefit cheques are smaller and are paid out over much shorter periods of time," says Cormack.

"Clearly the EI system is no longer there for many Canadians when they need it. That’s why we think most of the surplus dollars should be injected back into the EI system. The surplus should be used to make the EI system more accessible and more generous. Right now, too many unemployed Canadians are being left out in the cold – and that’s a situation that has to change."

Cormack says the AFL will be writing letters to Paul Martin and Jean Chretien outlining the Federation’s concerns about the EI surplus. Union leaders will also be requesting a meeting with Anne McLellan, the senior Liberal MP in Alberta, to discuss the issue.

"We can understand why the Liberals might be tempted by the EI surplus," says Cormack. "But it’s a temptation that should be resisted."

For more information call:
Audrey Cormack, President: 483-3021 or
Gil McGowan, Communications: 483-3021