EI reform the Harper way: only some will qualify

'The OECD recently reported that Canada has the second highest rate of jobless people living in poverty in the OECD.  But the Harper government's proposed EI reforms will only benefit the "deserving" few.' - Larry Brown.

By Larry Brown
National Secretary-Treasurer
National Union of Public and General Employees (NUPGE)

Ottawa (28 Sept. 2009) - It’s indisputable that Canada's EI system needs major reform.  The facts are inescapable.

EI eligibility requirements are way too strict and leave most unemployed workers out in the cold. Only about half of Canada’s unemployed are eligible to receive EI payments under the current rules. That’s a very slight improvement over the long term average of about 40% but it’s a shocking number in the midst of the worst recession since the Great Depression. And we still have unfair regional variations for eligibility, based on pre-recession experience.

In addition, the benefits paid out are too low, period. The maximum weekly benefit today is $447 – that’s 25% less than what it was in 1996 when it was $604. The average benefit today is just $335 per week. This isn’t enough to keep even a single adult at the poverty line, let alone support families. Moreover, those who do qualify for EI get on average only 32 weeks of benefits and some only get a maximum of 14 weeks.

$50 billion surplus

This lack of coverage is especially galling because EI is a program that employees and employers pay for, in fact more than pay for. The federal government has used more than $50 billion of surplus EI premiums since the mid-1990s to reduce its deficit over the years.

But if anyone still needed convincing that the system needs reform, they could look at the conclusions of the Organization for Economic Co-operation and Development (OECD).

The OECD recently reported that Canada has the second highest rate of jobless people living in poverty in the whole of the OECD. The only country with a worse record than Canada was the US. The OECD says that in Canada about 2/3rds of those without jobs are reduced to poverty. One reason for this is that Canada’s EI payments last for a shorter time than most countries.

Let’s spell out exactly what that means. There are 30 countries in the OECD. They are the wealthy countries of the world, by and large. Almost every single one of those countries has a better track record of providing for those who lose their jobs than we do.

Canada, a wealthy country by any stretch, leaves its unemployed to fend for themselves. The result is that if you lose your job in Canada you have a 66.66% chance that you and your family will fall into poverty.

Harper’s Reform: More EI for those who 'deserve' it more

Now we finally have a government 'reform' proposal, one good enough, the government clearly hopes, to keep the Conservatives from being defeated. The question of whether it’s good enough to keep them in power is for others to decide.

Certainly some workers will benefit, if only temporarily. But this reform is not only inadequate, it’s fundamentally conservative – the replacement of a relatively universal program by a higher benefit for the 'deserving' unemployed only.

The new legislation (Bill C-50) would extend EI benefits by five to 20 weeks for jobless workers who haven’t already collected EI benefits for more than 35 weeks in the past five years.

There is a straightforward problem with this proposal. It shuts out those who have EI claims that started before January 4, 2009. The hundreds of thousands of workers in manufacturing, steel and forestry who were laid off in 2008, when the flood of unemployment started in earnest, are out of luck.

Secondly, the proposal is temporary, with a drop dead date of Sept. 11, 2010, for new claims. If you’re laid off after that date, this extra EI will be gone.

Ending universality

But more fundamentally, when stripped down to its basics, the Tory proposal will end EI as a universal program accessible equally by all who have paid in to it. Sure, we have regional inequality now but within those regions all are treated the same.

With the Conservative reforms, some of the unemployed will be deemed to “deserve” EI more than others. If you’ve been laid off before, for more than the magic 35 weeks, you deserve less coverage than someone who hasn’t been laid off, according to the Harper government.

The 'deserving unemployed' will be treated better than those that have somehow proven their lack of moral fiber by being laid off previously. The 'deserving' – those who haven’t been laid off before – will get EI benefits for longer than those 'slackers' that have already lost a job along the way.

This part of the proposal injects a cruel imbalance into the EI program. Perhaps our collective capacity for outrage has been too severely tested. This proposal is not reform, it’s old Reform Party philosophy to its core.

Workers don’t lay themselves off. There are many sectors that layoff workers for temporary periods every year for reasons of maintenance, product changes or inventory adjustments. For others, their jobs get eliminated by their employers for all kinds of reasons having to do with profits and sales and, yes, recessions.

Punishing the victims

When workers get laid off from one job they go and find another, if at all possible. Now we learn that according to the Harper government, if someone is laid off by their employer because the factory closed or sales were bad or the company’s debt sank it, or the government cut jobs, or any of the thousand reasons that occur in the real world, they’ve lost their moral claim on full EI benefits.

While those who avoided that fate a bit longer are considered to be more worthy, more deserving, more entitled to fuller protection from the EI program.

We already, as a nation, subject most of our employees to poverty if they lose their job. Now our government proposes to add insult to injury, by ruling that those who lose their jobs once are even less deserving of full protection if it happens again.

Oh, Canada.

NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE