EI financing ruling signifies nothing (Legal view)

Cabinet didn’t have the right to set EI premiums in 2002, 2003, 2005
By Jeffrey R. Smith
|Canadian HR Reporter|Last Updated: 01/11/2009

It makes for good headlines — “Supreme Court rules EI financing illegal” — but the top court’s ruling on employment insurance financing was mostly a technical issue, according to a Calgary-based lawyer, and the decision won’t alter the EI landscape.

But it’s still an important decision that reaffirms Parliament’s power to legislate employment insurance, said Will Cascadden, head of the employment and labour department at Fraser Milner Casgrain.

Here’s what happened: Last month, the Supreme Court of Canada ruled Ottawa had illegally collected EI premiums in three years — 2002, 2003 and 2005 — when premium rates where set by the cabinet rather than Parliament. The Confédération des syndicats nationaux (CSN), a Quebec labour organization, argued the notion of having cabinet set rates instead of parliament violated the constitutional principle of no taxation without representation, enshrined in the constitution.