Quebec labour unions launch court challenge

Unions take fight to Quebec Superior Court in effort to force federal government to repay EI overpayments

Labour unions in Quebec are taking the fight over what to do with the Employment Insurance surplus to court.

Provincial labour unions are challenging the federal government’s use of EI funds for purposes other than paying benefits to workers in a Quebec Superior Court. The unions want the practice stopped and also wants the government to repay the $45 billion it has spent out of the EI surplus for purposes not related to paying benefits for workers.

According to a report from CanWest News Services, government insiders admit the legal challenge is a “serious concern.” A ruling that the federal government has spent the surplus and should repay it would be especially painful for Ottawa since it has already spent the money. A ruling against the government could also undermine the legitimacy of the entire EI system.

The $45 billion in EI premium overpayments is only $2 billion less than the $47 billion the government has spent paying down its debt.

Labour unions in Quebec aren’t the only ones rallying for Ottawa to return the money. The Canadian Labour Congress said the federal government has been taking more money out of the system than it has been paying to workers. For example, in 2000 Ottawa paid out $7.2 billion from EI to unemployed workers but kept $8 billion for itself which went into general revenues.

The CLC wants the government to repay all but $15 billion of the $45 billion extra in premiums the government has collected but used for other purposes. CLC said the $15 billion should be kept by the government in the EI plan because it’s estimated that is the amount Ottawa would need to cover shortfalls in premiums during a major recession.

But while business and labour agree that the money should be repaid, they differ in how that should be done. Many business groups are calling for cuts in premiums while labour groups want the repayment in the form of a restoration of benefits for unemployed workers.

A decision in the Quebec case is expected in September.

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