But on another ledger, the one known as the unemployment insurance account, it is running a $5-billion surplus. Who knew?

Only by adding the two together does the federal government emerge with a single, consolidated figure for "the budget deficit." That has critics, especially the business lobby, up in arms. Legally, they say, the premiums that workers and employers pay into unemployment insurance (or employment insurance, if you prefer the government's new name for it -- which means you probably also buy death insurance) are supposed to be kept in a separate, earmarked fund. So the feds are understating the deficit on their own budget by raiding the arms-length UI account.

The critics have done their best to make it sound like there's some sort of hanky-panky going on. But the fact is that the idea of a separate UI fund is an accounting fiction. The plan's premiums and benefits are simply lines in the federal budget like any other. They may be called "premiums," but in fact they are simply taxes by another name.

In any case, if we're going to pull surpluses out of the budget that aren't there, we might just as well add to the federal budget a deficit that isn't counted there, but probably should be: namely, the roughly $5-billion deficit recorded each year by the Canada Pension Plan, another earmarked fund.

The comparison is relevant, since one of the arguments for cutting UI premiums is that CPP contributions are shortly to be raised. Sorry, did I say "raised"? Make that "nearly doubled." Both are species of payroll taxes, meaning they are directly attached to employment earnings, and as such are said to be a "tax on jobs". Cutting UI taxes, it is argued, would create jobs, or at the very least, save the jobs that higher CPP taxes would destroy.

There are just two objections to this plan. First, the government needs the money. Higher CPP contributions are supposed to reduce the plan's "unfunded liability," which like any debt is a promise to pay someone something sometime in the future -- the someone, in this case, being not bondholders but pensioners. Lower UI premiums, on the other hand, would mean a higher budget deficit than would otherwise be the case. All that we would have accomplished by the exchange would be to transfer some of the CPP debt onto the government's books.

The second objection is that payroll taxes don't actually seem to be a "tax on jobs," according to economists. Mostly, they're a tax on workers. Sure, rising payroll taxes kill jobs, for as long as they go on rising. But over the longer term, as employers adjust to the new cost structure, the tax is passed through in less pay per worker, rather than in fewer workers employed. (The one thing we know about taxes on business is that business doesn't pay 'em.) Of course, if rising taxes kill jobs, then falling taxes would presumably create some, at least in the short run. But then we run into that first objection.

Are we stuck, then -- doomed to a future of rising payroll taxes and (short- term, anyway) fewer jobs? Not necessarily. Two ingenious proposals, both from the fertile minds at the C. D. Howe Institute, offer a way to cut payroll taxes without really cutting payroll taxes -- that is, in a way that won't reduce revenues, but might just create some jobs. How's that? First, payroll taxes don't always come out of workers' pay, especially for workers making the legal minimum. Cut UI premiums for workers on low wages, then, and more jobs might be the result. How to pay for it? By raising premiums for high-wage workers. At that end of the income scale, there is room to take the hit in lower wages, so there's less likelihood of any jobs being lost.

The second bright idea is intended to offset the impact of rising CPP contributions. If instead of simply feeding these into the CPP maw, the worker saw the increase in his contribution diverted into his own mandatory RRSP, he might not actually regard it as a "tax." Knowing that each dollar invested in his RRSP represented many more dollars in future benefits, he would be that much more likely to accept a reduction in wages in exchange.

Which means fewer jobs lost, even in the short run.

This gets us into larger issues, I realize, but if the subject is jobs, the idea is worth a look. At least it's one we can afford.