Ontario fails in plea for EI reform

TheStar.com – Canada – Ontario fails in plea for EI reform: Flaherty refuses to ease eligibility for payments but agrees to look into improving pension security
May 26, 2009.   Les Whittington, OTTAWA BUREAU

MEECH LAKE, Que. – Ontario failed to shake the Harper government’s refusal to enrich employment insurance but made some progress on the growing problem of pension shortfalls for retirees, Ontario Finance Minister Dwight Duncan said after a federal-provincial meeting yesterday.

Duncan came to the finance ministers’ one-day gathering vowing to push for immediate action on EI. The Ontario Liberals say laid-off workers in this province are being shortchanged under current rules, with nearly 70 per cent of unemployed Ontarians unable to qualify for regular EI payments.

But Prime Minister Stephen Harper’s government is resisting demands to ease eligibility rules even though federal opposition parties threaten to force an election over what they say is an inadequate program during a recession.

Asked about his demand for EI improvements, Duncan said, “Clearly, we have not achieved that objective.” But he said Ontario will continue to press Ottawa on the issue, noting that increasing EI payments is the fastest way to pump stimulus money into the economy.

Ontario didn’t win support for Duncan’s call for a national summit on what can be done to improve the adequacy of private pensions. But Duncan said he was encouraged by the depth of the ministers’ concerns about Canadians’ lack of retirement savings.

“I was absolutely astounded at the level of consensus among all the ministers who were in that room, including the federal minister, that we need to look at this more.”

Earlier in the day at Queen’s Park, Premier Dalton McGuinty said he would consider creating a provincial pension plan if Ottawa didn’t act. He said Canada is “on a collision course when it comes to insecurity for seniors who won’t have adequate levels of income,” and maintained it is an issue the federal government must take the lead on.

“This is as important an issue as is our national medicare system and as our national employment insurance system, making sure that all Canadians can enjoy a decent level of income benefit in their retirement years,” McGuinty said.

Flaherty and his colleagues agreed to set up a task force, including Duncan, to report by year-end on options for improving pension security. The federal government will be represented by Ted Menzies, Flaherty’s parliamentary secretary.

Corporate pension plans have been in trouble in part because of last year’s collapse of stock markets and other factors that have left many companies – including General Motors Canada and Air Canada – unable to deal with billions of dollars of obligations.

Flaherty said only about 10 per cent of private pensions are under federal jurisdiction. He sounded reluctant about the possibility of moving hastily to take a lead role in a federal-provincial push to help Canadians build up their nest eggs.

“We have probably the best pension plans in the world for Canadians,” he said. “Can we build on that system to provide more … retirement income adequacy in the future? That’s an open question. Some studies have been done by some of the provinces.

“We need to do a lot more work on it, which is why we agreed to have a research working group,” he said.

With files from The Canadian Press
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FEDERAL DEFICIT ‘SUBSTANTIALLY’ BIGGER

The federal budget deficit this year will be “substantially more” than the $33.7 billion predicted in the January budget, Finance Minister Jim Flaherty said yesterday.

He declined to say how much more after meeting provincial finance ministers at Meech Lake, Que. In the budget, Flaherty predicted five years of deficits.

Ontario Finance Minister Dwight Duncan said he doesn’t see Ontario’s budget deficit ballooning above the $14.1 billion forecast. He said his 2009 budget, delivered a few months later than Flaherty’s, had factored in a deep recession.

– Les Whittington

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