Tories overstate cost of Liberal EI plan: budget office

The Conservative government has overestimated the price tag of the Liberals' proposed employment insurance plan by nearly four times the actual cost, the parliamentary budget office said Friday.

According to the budget office, the Liberals' $1.1-billion cost projection for their EI plan is a "reasonable estimate." The Conservatives have pegged the cost at $4 billion.

But the office's report said the government’s estimate "is not consistent" with the proposal because it wrongly included unemployed individuals not covered in the plan. For example, special beneficiaries, new entrants and re-entrants to the labour force would not be included.

The Liberals, who want to set a temporary, single national requirement of 360 hours of work before EI benefits are paid, have said new entrants and re-entrants to the workforce would still be required to work a minimum of 910 hours to qualify for EI.

Currently, there are 58 different thresholds for qualifying for EI benefits across the country, ranging from 420 to 700 hours of work, depending on local unemployment rates.

Liberal Leader Michael Ignatieff and Prime Minister Stephen Harper agreed in June to set up a committee to examine employment insurance reform after the Liberal leader threatened to trigger a confidence vote on the issue. But Ignatieff said negotiations with the Tories over the summer have been "a charade."

The government has announced it will introduce EI reforms to help long-tenured workers as soon as Parliament resumes next week.

Alex Laurin, a senior policy analyst with the C.D. Howe Institute, said Friday that the government would likely hike EI premiums by the allowable maximum in each of the next five years so it can wipe out the EI deficit caused by rising unemployment.

Earnings up to $42,300 carry an EI premium rate of 1.73 per cent. The government can bump up that rate by 0.15 percentage points each year.