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The Québec Parental Insurance Plan’s Deficits should be eliminated by reducing certain benefits

Montreal, September 23, 2010 – Claude Garcia, former president of Canadian operations at Standard Life and associate researcher with the Montreal Economic Institute (MEI), analyzed the results of the Québec Parental Insurance Plan (QPIP) in a paper published exclusively on the MEI’s website. According to the author, this program has had some positive impact on the number of births in Quebec and on the employment rate of women aged 25 to 54, which now exceeds that observed in the rest of Canada. Nonetheless, given the successive deficits recorded by the plan since its creation ($180 million in 2009 alone) certain benefits should be revised.

Mr. Garcia questions the generosity of the plan’s benefits, which can actually be paid out simultaneously to both parents. One possible reform would be to stipulate that benefits be paid out only to one parent at a time for taking care of the newborn.

As for the subject of funding the program, Mr. Garcia considers that it would be fairer for the plan to be funded equally by employees and their employers. “Employers currently pay premiums equal to 1.4 times the premiums paid by their employees. When funding unemployment benefits according to this formula, this higher premium for the employer can be justified since the employer has a certain amount of control over layoffs. The same certainly cannot be said for parental insurance benefits,” the researcher explains.

Claude Garcia’s analysis can be consulted free of charge on the Institute’s website.

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The Montreal Economic Institute (MEI) is an independent, non-partisan, non-profit research and educational organization. Through studies and conferences, the MEI informs public debates in Quebec and Canada by suggesting wealth-generating reforms based on market mechanisms.

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Information and interview requests: Ariane Gauthier, communications coordinator, Montreal Economic Institute, Tel.: 514 273-0969 ext. 2231 / Cell: 514 603-8746 / Email: agauthier (@iedm.org)

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