Employment insurance leaving many more in the cold

Liberal, New Democrat and Bloc Québécois MPs revived the fall's centre-left parliamentary coalition on March 10 to pass an NDP motion correcting the worst inequities of Canada's inadequate and unfair "employment" insurance system.

The vote was 152 in favour. All 141 Conservative MPs voted against. The coalition's success was symbolic -- but futile. Opposition motions are not binding on the government. And just a week earlier, on March 4, the Liberals had joined forces with the Conservatives to pass the government's "stimulus" budget with none of the proposed EI reforms.

In the deep recession of the early 1980s, 80 per cent of working Canadians were covered by unemployment insurance. Benefits averaged about 65 per cent of previous income.

Although this recession is expected to be the worst since the Great Depression, today, just 38 per cent of working Canadians will qualify for support. Their benefits will be only 55 per cent of former salary.

NDP MP Chris Charlton (Hamilton Mountain) proposed the EI reforms necessary to revive the program gutted by the Liberals in the mid-1990s:

"ö Eliminate the two-week wait to receive benefits.

"ö Abolish the unfair requirement that the jobless in low-unemployment regions work almost twice as long as the jobless in high-unemployment regions to qualify.

"ö Institute one nationwide qualifier of 360 hours of work to receive EI.

"ö Raise the wage-replacement level from 55 to 60 per cent of former salary.

"ö Base benefits on the best 12 weeks of earnings in the qualifying period.

"ö Make it easier for the unemployed to receive training.

"ö Allow the self-employed to qualify.

In fairness, the Conservative budget made two significant EI changes. Over the next two years, claimants can receive five additional weeks of benefits, a program expected to help about 400,000 EI recipients.

And the government will spend $200 million over the next two years on work-sharing projects. Employees work fewer hours to keep others employed and all obtain compensating EI benefits.

"The bottom line is that we need to get money into the hands of those who are involuntarily unemployed," Charlton told the Commons. "We also need to remember that employment insurance is the best poverty-prevention program in the country during economic hard times."

EI operates under an inordinately complex system of rules that bases eligibility and the duration of benefits on the local unemployment rate. If the local unemployment rate is under seven per cent, 700 hours are required. If unemployment is at 13.1 per cent or higher, just 420 hours are needed.

But if you're jobless, you're jobless. Why should you be forced on welfare and food banks just because of where you live?

Compared to previous recessions, EI leaves many more in the cold. Last October, just 43 per cent of the unemployed qualified for EI benefits. In Ontario, it was 32 per cent. In B.C., 35 per cent.

Today, only 40 per cent of men and 32 per cent of women qualify for EI.

"The system is neither equitable nor accessible and it is high time all Canadians were treated equally," Charlton said.

Liberal MP Dominic LeBlanc (Beausejour) cited the anomaly of two New Brunswickers who work in the same fish plant. One commutes from Moncton and the other lives in the fish plant's small community.

"The person who commutes 20 minutes a day would need two or three times the number of hours to access employment insurance and that individual's benefits would last for a much shorter period of time."

Charlton said the philosophy behind the current EI system "speaks to an ideological predisposition to view it as a moral hazard to provide too much assistance to unemployed workers.

"That is why the minister of human resources and skills development is on the record stating, 'We do not want to make it lucrative for them to stay home and get paid for it.'

"This is from the minister in charge...It is absolutely shameful."

Despite a decade of "blistering" economic growth, the gap between rich and poor in Canada has dramatically widened, economists Armine Yalnizyan and Seth Klein of the Canadian Centre for Policy Alternatives say. The rich are much richer; the poor, much poorer. The middle class is shrinking.

"Many Canadians head into the 2009 recession with little or nothing to fall back on," they continue in the March issue of the CCPA's Monitor magazine. Canadians' average savings rate plummeted from $7,600 to just $2,000 annually between 1990 and 2008. Average household debt load rose by 71 per cent in real terms during the same 18 years. More than 3.3 million Canadians now live in poverty and as many as 300,000 are homeless.

"If the federal government fails to act swiftly and decisively, the economic fragility of Canadian households, businesses and communities could quickly accelerate into one of the deepest and most protracted periods of economic turmoil Canada has faced," Yalnizyan and Klein conclude.

Frances Russell is a Winnipeg author and political writer.

Republished from the Winnipeg Free Press print edition March 18, 2009 A13