Harper's EI financing agency spending millions doing nothing.

[MiddleClassCentrist]

http://www.cbc.ca/news/politics/story/2012/01/18/pol-weston-ei.html

A federal agency created by the Harper government with great political fanfare in 2008 is costing millions of dollars to achieve pretty much nothing.

The Canada Employment Insurance Financing Board has just about everything a budding government agency could want.

So far, it has spent over $3.3 million for new offices, computers and furniture, well-paid executives and staff, travel budgets, expense accounts, board meetings, and lots of pricey consultants.

All that's missing is a reason for it to exist at all.

Chairman David Brown: 'We haven't had to do nearly as much as our original mandate intended.' Chairman David Brown: 'We haven't had to do nearly as much as our original mandate intended.' (CBC )

The Conservative government set up the agency ostensibly to perform three main functions.

The first was to set the annual employment insurance contribution rates that determine how much Canadian workers and employers have to pay into the EI fund in a given year.

But in all three years the board has been in existence, the Harper government has simply capped EI rates to spare Canadian workers from potentially huge premium increases.

As a result, the rate-setting agency has yet to set a single rate.

P.O.V.

Should the CEIFB be axed? Take our survey.

The board's other main responsibility is to invest any surplus EI funds.

That has never happened, either.

Since the government started capping EI contribution rates, the employment insurance program has been running a deficit now totalling almost $9 billion.

There has simply never been a surplus dime for the board to invest.

Finally, the agency is charged with managing a $2 billion EI contingency fund the government promised to set up, but never did.

Not overwhelmed

In short, the board has no rates to set, no surplus to invest, no contingency fund to manage, and little chance any of that will change in the near future.

Executive director Phil Charko: about $150,000 a year to work part time. Executive director Phil Charko: about $150,000 a year to work part time. (CBC)

The chair of the agency, Toronto lawyer David Brown, admits the organization isn't exactly overwhelmed with work.

"We haven't had to do nearly as much as our original mandate intended us to do," Brown said in an interview.

"So we've slowed down on some of our development activities until it is clear that we are going to be able to do some of the things that we will be asked in the future."

The head of the Canadian Taxpayers' Federation is incensed.

"I think average taxpayers want to know what these people are doing with their time," Gregory Thomas tells CBC News.

"I think people need to call their MPs and let them know that they are tired of their money being wasted."

Raises for everyone

Mostly, the little agency that doesn't seems to have been keeping busy spending millions of dollars turning itself into a thoroughly modern bureaucracy.

Its published budget for the current year includes giving everyone raises, and moving the entire agency into new offices — all at an expected cost of $1.8 million.

Finance Minister Jim Flaherty tells Parliament about the new agency in 2008. Finance Minister Jim Flaherty tells Parliament about the new agency in 2008. (CBC)

Compensation costs include stipends and expenses for the seven appointed board members, and $244,000 for a couple of executives.

The agency's executive director, retired senior public servant Phil Charko, is being paid about $150,000 a year to work part time.

The budget provides another $200,000 to pay an investment manager if the agency ever has any money to invest.

Another $300,000 is budgeted for "additional corporate services such as IT management, human resources management, and translation services."

'Improve corporate culture'

Despite so many having so little to do, the agency has earmarked over $250,000 to pay outside consultants, including public relations professionals to help produce the board's annual report showing what happened to all the money.

Finally, with two full-time employees on the payroll this year, the entire agency moved out of its former offices into larger space in a different building to "improve the corporate culture."

The total costs of the move are not shown in the agency's budget, although it mentions an estimated $89,000 just for new furniture.

Board chair Brown says the move was mainly to create enough space to accommodate financial experts on a temporary basis as needed, even though they all have permanent desks in various federal government departments.

Aside from spending money, what the agency seems to do best is create bureaucratic plans and policies for itself.

Fits in a minivan

Its planning report details many important "strategic priorities" for this year, including implementing "the communication and outreach strategy."

The agency's entire staff would fit into a minivan, but one of the priorities this year has been to "develop and implement formal HR (human resources) policies in such areas as staffing, staff relations and training."

Finally, the agency with no real purpose wants to develop "measures of corporate performance."

All of which may leave ordinary Canadians wondering what the Harper government was thinking.

The Conservatives passed legislation creating the new agency in June of 2008.

For years, the EI fund had been running huge annual surpluses that mainly Liberal governments had simply siphoned off to help pay down the country's debt and other uses.

$8.8B in the red

The new agency's primary role was to eliminate those surpluses in future by setting the annual EI contribution rate at break even, taking in just enough revenue from workers and employers to cover unemployment benefits and any deficits in the fund.

Five months later, the economic crash caused unemployment to soar and EI contributions to plummet.

By last year, the EI fund was swimming in $8.8 billion of red ink.

If the board had been allowed to exercise its mandate to set EI rates high enough to cover deficits in the fund, Canadian workers would have been hit with huge increases in annual employment insurance premiums. Instead, the Harper government used its own powers to simply freeze EI premiums for 2010, and then capped increases to relatively minor amounts in subsequent years.

Thomas of the Taxpayers' Federation says the government should cut its losses.

"I think they have to fess up that things didn't work out, and it's a waste of money."

Alyson Queen, a spokeswoman for Human Resources Minister Diane Finley, says the government has no intention of scrapping "an important stewardship group that oversees the integrity and transparency of EI financing."

The agency, Queen says, "is operating in a fiscally responsible manner," and will someday be fully operational.

Edited January 21, 2012 by MiddleClassCentrist

[cybercoma]

Everyone calling for the gun-registry to be scrapped due to the "exorbitant costs" better get their backsides in here and call for this thing to be scrapped.

[eyeball]

I imagine they'll have budgeted for the severance packages workers at CEIFB will receive. Will they have to declare their severance pay when they file for EI?

[cybercoma]

Yes.

[AngusThermopyle]

Wow! What a total joke. This has to be disolved asap before any more money is thrown down this black hole. It really would stand as a good joke if it wasn't such a sad and wastefull situation.

[Topaz]

I saw this article and was going to post it but some on here think I pick on the Harper government too much, but its soo easy to do when they do stupid things with taxpayers money. I understand the EI is 7-8 mil or bil in the red, so it going to be a long long time before this agency is up and running. I get the feeling the Tories are much further in financial trouble than they want to say. Only way I guess to find out the truth about this government is to vote them out and let the next party tells all the dirty things this government has done.

[CPCFTW]

Governments waste money? Stop the presses!

This department needs to be scrapped, but so does half of the public sector. And conservatives are the only one who will face this reality.

Anyone who has worked in both the public and private sector knows how horribly inefficient and unproductive the public sector and public sector workers are.

There are probably 7000 employees at EC to do the work of 3500, and 5000 at INAC to do the work of 2500. Hell you can say the same about every federal department.

This story is a drop in the bucket.

Edited January 21, 2012 by CPCFTW

[AngusThermopyle]

Only way I guess to find out the truth about this government is to vote them out and let the next party tells all the dirty things this government has done.

The problem with that is that the next government will also consist of politicians which means they will just lie and fabricate whatever they wish to suit their agenda. Such is the nature of any politician.

[CPCFTW]

The problem with that is that the next government will also consist of politicians which means they will just lie and fabricate whatever they wish to suit their agenda. Such is the nature of any politician.

Actually, the main problem is that the other guys actually want to spend MORE money. You know, to stimulate the economy, and protect trees, and fight for the middle class, and save the homeless, and feed the poor, and inject the addicted, and coddle the children, and stand up for workers rights, and abort fetuses, and on and on.

Edited January 21, 2012 by CPCFTW

[MiddleClassCentrist]

The problem with that is that the next government will also consist of politicians which means they will just lie and fabricate whatever they wish to suit their agenda. Such is the nature of any politician.

The root of the problem lies in the fact that politics and power attract the wrong people.

Compounding the problem is voter psychology. A truthful politician is an unsuccessful politician. Voters don't want truth, they want dreams, ambition or simply just to be told that everything is OK.

[fellowtraveller]

Agreed then, lay off all staff and close the office. It will save several hundred thousand bucks per year, well worth the whining we will hear at MLW about loss of govt services.

Speaking of EI rates, wy is it again that areas with high employment get longer qualifying times and shorter insurance terms than areas with low employment, yet pay the same premium rates for insurance?

This is an insurance plan. Normally, policyholders in an insurance plan pay premiums that are directly related to risk. A wage worker in Alberta is less likely to be laid off than elsewhere in Canada. He/she is also more likely to get aother job more quickly, but of course is not guaranteed that. Yet he/she pays the same premiums, has a longer qualifying period and gets benefits for a shorter time.

Isn't that completely backwards? If you work in a place that has a higher likelihood of layoff/long term unemployment, shouldn't your insurance premiums be significantly higher?

[MiddleClassCentrist]

Governments waste money? Stop the presses!

It's never OK to throw away tax payer money to friends who were hired in that dept. Never.

The Conservative is not convincing me that it is competent at cutting the overall budget as effectively as another other government. Especially important because they fly the alleged flag of fiscal responsibility (which we know is a myth based on their program spending increases).

Governments waste money? Stop the presses!

This department needs to be scrapped, but so does half of the public sector. And conservatives are the only one who will face this reality.

Anyone who has worked in both the public and private sector knows how horribly inefficient and unproductive the public sector and public sector workers are.

I've worked in both. Both have bad apples.

Edited January 21, 2012 by MiddleClassCentrist

[CPCFTW]

It's never OK to throw away tax payer money to friends who were hired in that dept. Never.

The Conservative is not convincing me that it is competent at cutting the overall budget as effectively as another other government. Especially important because they fly the alleged flag of fiscal responsibility (which we know is a myth based on their program spending increases).

I've worked in both. Both have bad apples.

The bad apples in the private sector are the ones who end up collecting ei. Bad apples in the public sector get shuffled around various departments for 30 years then retire with a golden parachute.

[WWWTT]

Actually yesterday I saw a three way debate about this topic on "Power and politics" on the CBC.

And the conservative MP(his name eludes me now) kept harping about how the liberals mismanaged EI over five years ago.

Is this how the conservatives are going to handle any criticism for the next four years,by blaming the previous liberals?

Man alot of Canadians are going to be happy to see Harper and company go in four years!

WWWTT

[cybercoma]

And the conservative MP(his name eludes me now) kept harping about how the liberals mismanaged EI over five years ago.

That's interesting because it's 2012. Minus 5.... carry the two.. umm.. that makes 2007. Stephen Harper took office in 2006, which means Liberal management of EI stopped in 2005. Really, we're talking about things the Liberals did roughly a decade ago and earlier. Whatever happened to that surplus anyway?

[Tilter]

Actually yesterday I saw a three way debate about this topic on "Power and politics" on the CBC.

And the conservative MP(his name eludes me now) kept harping about how the liberals mismanaged EI over five years ago.

Is this how the conservatives are going to handle any criticism for the next four years,by blaming the previous liberals?

Man alot of Canadians are going to be happy to see Harper and company go in four years!

WWWTT

In your dreams--=- the same one where you see the White knight NDP leader (if you ever find one) ride boldly into the Tory sunset, saving Canada from --- (HMMM no platform here to see,) something????

[Tilter]

All of which may leave ordinary Canadians wondering what the Harper government was thinking.

I guess this should read:

All of which may leave ordinary Canadians wondering what the House of Commons was thinking.

The Conservatives passed legislation creating the new agency in June of 2008.

Pardon me if I'm wrong but shouldn't this line read:

The House Of Commons, all parties voting, passed legislation creating the new agency in June of 2008.

For years, the EI fund had been running huge annual surpluses that mainly Liberal governments had simply siphoned off to help pay down the country's debt and other uses.

$8.8B in the red

You answered your own question as in---

mainly Liberal governments had simply siphoned off

Edited January 22, 2012 by Tilter

[Jerry J. Fortin]

That's interesting because it's 2012. Minus 5.... carry the two.. umm.. that makes 2007. Stephen Harper took office in 2006, which means Liberal management of EI stopped in 2005. Really, we're talking about things the Liberals did roughly a decade ago and earlier. Whatever happened to that surplus anyway?

They probably spend it. No wait a second, they meant to take the two billion and bleed of the interest to fund the program bureaucratic expenses.!!!!