Canadian_Retirement

EI as a solution to CPP

Published On November 27, 2013 | By Joseph (Ken) | Economy, Government, Retirement

EI

Canada’s Tax Burden Shifting From Corporations Onto People: Economist

“For the first time in Canadian history, more than half of the federal government’s revenue in 2014 will come from personal income taxes — a vivid sign that Canada’s tax burden is slowly shifting away from corporations and onto consumers.”

Although the article is important, in that corporations are slowly becoming perceived as more important than people, there was a gem of an idea hidden in the article.

“With the EI fund taking in $3.3 billion more this year than it paid out in benefits, the CTF argues EI should be replaced with individual savings accounts, which people can draw from if they lose their employment, or save for retirement.

Before consideration should be given to doubling CPP, the Canadian government should merely transform EI.

Employment Insurance A ‘Cash Cow’ That Needs Replacing: Group

“The federation says Canadians should be allowed to keep the money they and their employers pay in EI premiums in personal unemployment accounts.  Under the plan, EI contributions would be accessed only if workers become unemployed. For those who rarely or never use EI, the federation says they should be allowed to keep their contributions for retirement.”

Gregory Thomas: The EI ripoff

“This year in Canada, every working Canadian couple, with each worker earning at least $47,400, will watch as $4,277 in EI “contributions” are shipped to Ottawa on their behalf. The government has hiked that maximum EI tax haul by 25% since 2008, when it was $3,412.”

For Canadians who plan their lives around staying employed — think about school teachers, bus drivers, lab technicians, accountants, business managers — EI is nothing more than a rip-off, pure and simple.

But a working Canadian couple could save over $67,000 in 10 years, if they simply were allowed to keep their EI contributions in their own, personal, tax-sheltered rainy-day fund. They could use the money in the event of a job loss or keep it for their retirement.

Ding! Ding! Ding!

 

 

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About The Author

Joseph (Ken)
(Ken) is a Registered Public Accountant with over 25 years of public practice experience in the accounting profession. Ken specializes in accounting information systems, taxation and financial reporting.

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