The Canadian Press - ONLINE EDITION

Supreme Court agrees to hear appeal of employment insurance decision

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OTTAWA - The Supreme Court of Canada has agreed to hear an appeal of a case in which one of Quebec's leading labour organizations sued the Harper government over its 2010 move to close the old federal employment insurance account and transfer $57 billion into the government's general revenues.

The federal government argues the matter was already dealt with in a 2008 decision, while the Confederation des Syndicats Nationaux contends the move was unconstitutional.

A lower court sided with the federal government, but the Quebec Court of Appeal overturned that ruling, leading to the Supreme Court.

In the 2008 ruling, the Supreme Court found the former Liberal government broke the law in revamping the employment insurance system, transforming the EI premiums paid by workers and employers into a back-door, unconstitutional tax.

But the court also rejected claims by organized labour that the governments of Jean Chretien and Paul Martin deliberately ran up massive EI surpluses so they could divert the money to balance the federal budget and it issued no order for repayment.

As usual, the Supreme Court did not provide any reasons for its decision to grant leave to hear appeal.

Note to readers: This is a corrected story. An earlier version said the Confederation des Syndicats Nationaux had been granted leave to appeal. In fact, the federal government was granted leave to appeal.

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