It is a rule of thumb in Canadian politics that any idea that attracts support from every party ought immediately to be mistrusted. Consider, in this light, the all-party consensus that the Finance Minister should make deep cuts in "employment insurance" premiums.

Conservative leader Jean Charest is for it. So is the NDP government of British Columbia. The Reform Party has long favoured such a move. Some Liberal MPs, notably the parliamentary secretary to the Minister of Human Resources, Robert Nault, have been so bold as to predict a reduction of "at least" 25 cents off the current premium rate of $2.95 per $100 of insurable earnings in the next budget. Business and labour, editorialists from the Toronto Star to the Financial Post: all are agreed. "I don't think you're going to find too many people opposed to a major premium reduction," says Nault.

No kidding. When it comes to a free lunch, Canadian politicians are always willing to put partisanship aside. So, in the spirit of this emerging consensus, let me offer a suggestion. Let's cut them to zero. (The premiums, I mean, not the politicians.) The levies in question no more deserve to be called "premiums" than the program should be given the name of "employment insurance." It has nothing to do with insurance, except insofar as it may be said to insure against employment. So long as this remains the case, the "premiums" are simply taxes by another name.

In any plan run on insurance principles, the premiums paid by each employer and employee would be related in some way to their likelihood of making a claim. That is not the case with EI, nor was it when it was still called UI: not only are there wide variations from industry to industry, region to region and firm to firm in the ratio of benefits collected to premiums paid, but it remains possible to draw benefits after multiple claims -- if now in reduced amounts. Imagine a fire insurance scheme that let you burn your house down year after year after year.

If the premiums are really taxes, then there is no particular significance to the fact that the program is running an accumulated "surplus," now $5- billion and headed for $10-billion next year. Proponents of cutting premiums say this artificially understates the federal deficit, or imposes a needless burden on workers and firms. But the only reason you would earmark revenues to expenditures in this way is if there were some practical connection between the two. Since there isn't, the government is quite right to add EI revenues to general revenues, and to subtract the annual surpluses on the EI account from the general government deficit.

If we are only pretending to run EI as a stand-alone program, then perhaps we should stop. The only justification for financing it through earmarked "premiums" would be if these were adjusted on insurance principles; since these are in fact not adjusted on insurance principles, there is no justification for collecting the premiums. The program might as well be paid for out of general revenues, like any other.

On the other hand, it wouldn't make much difference if it were. The argument, much repeated, that EI premiums are a "tax on jobs" rests on the assumption that, because the law says that employers pay part of the premium, they actually do. But the actual incidence of the tax is a matter of some dispute. Who finally gets stuck with the tab will depend on the relative bargaining power of business and labour. If business wins, workers eat the tax in the form of lower wages. If labour wins, business takes lower profits.

But since businesses don't like taking lower profits if they can avoid it, this often means fewer workers are employed.

Often, but not always. The evidence suggests that it's not the level of payroll taxes that matters for employment so much as the trend. So long as premiums are rising, the effect is mostly to cost jobs; but in the long run, the burden of the tax is borne in wages. All that's needed, then, is not to raise premiums any more. In any case, if payroll taxes are a "tax on jobs," so is the income tax. So is any tax that drives a wedge between the cost of labour to the employer and the take-home pay of the employee. So it wouldn't much matter, from an employment standpoint, whether EI were financed through premiums or the income tax.

What is clear, however, is that it has to be one or the other. You'll notice that no member of the Coalition to Cut Premiums Now has suggested how they intend to recoup the hundreds of millions of dollars the government would no longer have at its disposal. Which is to say, they intend to let the deficit rise. I thought everyone was agreed it should be cut.