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MATERNITY AND COMPASSIONATE LEAVE AT RISK

The Employment Insurance (EI) fund is a federal cash cow. It now has a surplus of $43.8 billion in its account. This sum is due to the fact that according to Auditor General Sheila Fraser, in 2001 about 15.1 million Canadians paid into the plan, but only 2.4 million actually withdrew benefits. For years the federal government has used the surplus from this fund to cover its deficits as well as other projects, and to keep funds handy for future rainy days. The trouble is, however, that the money in the EI fund is not the government's money. Rather, the fund is composed entirely of financial contributions made by employers and employees. No government contribution is ever paid into this fund. (See Reality, March/April, 2002, p.3.) In private industry, this use of other people's money would be characterized as misappropriation of funds.

According to Auditor General Fraser, the fund only requires $15 billion as a cushion to maintain the balance between premiums and benefits. Yet none of this $43 billion surplus has been used to improve EI services. According to the Auditor General, 65% of callers trying to get through to EI call centres, get a busy signal. Also, the speed and quality of performance in most regions is disgraceful. It takes far longer than 28 days to receive the first payment in most regions, which is the supposed timeline set by the EI. Instead of rectifying these problems, by putting some of the surplus to this use, the government has instead swept all the surplus money away into its account (the Consolidated Fund) to be used at its own discretion.

To make this systematic over-charging or fleecing of employers and employees more palatable to the public, the government has extended the use of the fund from the payment of unemployment benefits, to also paying out maternity and compassionate leave benefits - programmes over which the federal government has total control, but which are programmes that actually fall within provincial jurisdiction.

For seven years the Quebec government has bitterly complained about the federal government grabbing provincial monies and paying it back to Quebec residents as federal largesse in programmes that are solely within provincial jurisdiction. The Quebec government wanted instead to introduce its own provincial maternity benefits programme - a programme providing much higher benefits and more flexibility in that it would include self-employed and contract workers who were excluded from the federal government programme.

Fed up with the refusal by the Liberal government to relax its hold over the programmes, the Quebec government finally went to court to challenge the federal government's control of the social programmes and their payout from the EI fund.

On January 28, 2004, the Quebec Court of Appeal handed down its decision. It was a whopper! The court held that the federal government had no business funding social programmes such as parental and compassionate leave from the EI fund, since these social programmes were solely within provincial jurisdiction. Further, apparently to stave off further abuses of this fund, the Court held that the EI fund should only be used for the purpose of replacing the wages of people who lose their jobs, and for nothing else.

The Canadian Chamber of Commerce applauded the decision. However, Ken Georgetti, head of the Canadian Labour Congress, was furious with the decision, stating that if these social programmes are left to the provinces, some of the provinces would be certain to cut benefits.

This ruling was a shock to the federal Martin government, which has spared no effort proclaiming, as reflected in the February 2, 2004 Throne Speech, that one of its objectives was "to help Canadian families." This Quebec decision has serious implications for Ottawa's plans to introduce other social programmes, such as increased childcare, without first obtaining provincial consent. The Quebec decision also creates obstacles for the agreement signed in 1999 by Ottawa and the provinces (except Quebec), which gave the federal government a major role in defining national social programmes.

The federal government has 60 days to launch an appeal. In the meantime, Joe Volpe, Minister of Human Resources and Skills Development, has assured Canadians that no federal programmes will be stopped, and that the Quebec Court of Appeal decision will not have any immediate impact on parental and compassionate leave benefits. But, in the long term … who knows?

The lawyers for the respective governments will undoubtedly soon meet in the Supreme Court. At that hearing, however, the federal government will not be defending its capacity to play a leadership role in the social arena; rather, it will be defending its questionable actions in collecting other people's monies to use for its own purposes.

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