Let me take Tim's defence of Stephen Harper's job-killing permanent tax on everything line-by-line:
"Lifting a two-year freeze is not the same as increasing premiums."
Tim is of course right. "Unfreezing" doesn't have to mean taxes go up. It could mean taxes go down. In fact EI rates fell for 12 straight years under the Liberal government. In this particular case, ending the freeze does mean rates are going up. Who says? Jim Flaherty's economic update, that's who (I know taking anything Flaherty says at face value is dangerous but in this case, I think he may be right).
"Today, because of the freeze, EI premiums are lower than they otherwise would be."
Tim is yet again right (calm down, I will disagree with him in a minute). Rates are lower than they would be otherwise and the EI fund is running a deficit. Once the freeze is lifted, Harper plans on running a surplus in part to recoup the EI fund deficit and more significantly, run a giant surplus to pay down the federal deficit. Part of the EI surplus will come from a rise in taxes. Don't take my word for it, let me quote from impartial economist Dale Orr:
"The recession, with employment falling and the number of unemployed skyrocketing, will cause deficits in EI over the 2009 - 2011 period. The government now plans to re-coup these losses partly by raising EI premiums in 2012, to compensate for the previous EI deficits. In fact, the forecast surplus in EI of $19 billion over 2012/13 - 2014/15, significantly exceeds the EI deficits caused by the recession of 2009 and 2010. "
Back to the weakest part of Tim's argument:
"When the freeze is lifted, premium changes will be decided by an independent body, not the government."
Tim is referring to the Canada Employment Insurance Financing Board. Let me provide a brief chronology of the CEIFB's independence under this government:
1. Canada Employment Insurance Finance Board is created in budget 2008 in order to set EI rates;
2. Flaherty freezes EI rates in budget 2009.
It was Harper and Flaherty's decision to freeze rates. Maybe it was even the right decision. It certainly wasn't the independent board's decision. In other words, it took less than 12-months to show that it is the government calling the shots, not some independent board.
Moreover, Flaherty has no problem trumpeting frozen EI rates as part of the government's "Economic Action Plan."
So Harper (and Tim) take credit for the freeze, takes credit for the lost revenue as a form of economic stimulus but everything that happens going forward - that's all a bunch of nameless, faceless bureaucrats deciding, right?
More importantly, Tim misses the key point: Harper claims that he will not raise a single tax in order to balance the budget. Dale Orr has pointed out that he is largely reducing the deficit thanks to raising payroll taxes. Even if you buy that it is the CEIFB and not the Prime Minister who is setting how large the EI increases will be, it is impossible for the government to claim with any credibility that they will not raise taxes in order to reduce the deficit when that is exactly what is happening.
As a taxpayer, I don't give a damn if the decision on whether the tax increase should be 5 per cent or 10 per cent is made by the Minister of Finance or an anonymous board member.
In other words, Stephen Harper is hiding the fact that he is imposing a job-killing permanent tax on everything.