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Matthew Mendelsohn (Handout)
Matthew Mendelsohn (Handout)

MATTHEW MELDELSOHN

Changes to EI leave the job unfinished Add to ...

The federal government has undertaken the biggest overhaul of employment insurance in two decades but has done almost nothing to address the big structural problems at the core of the system.

The proposed changes have raised the ire of many in Atlantic and rural Canada – who rely disproportionately on the system – but will do little to improve the system for people in big cities, Ontario and the four western provinces.

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Some of the proposed changes make good sense. Right now, those on EI are supposed to be looking for and accepting “suitable” work, but “suitable” is not defined. Interpretations of “suitable” are idiosyncratic and inconsistently applied across the country, so a clear definition could help create a more nationally consistent system.

Likewise, the investment of resources into better labour market information, along with daily communication with EI recipients about available jobs, should improve the chances of the unemployed of finding work and employers of finding workers. The idea of a “universal job board” is a good one.

And the evidence is overwhelmingly strong that in some communities and some industries, some people on EI choose not to take available work. More aggressive intervention to link frequent EI claimants with jobs in their region is a step forward.

But the government has done much more than that. Those who find themselves out of work will be faced with a program that provides them with less for the money they contribute. The new measures will affect all EI recipients, including first-time claimants, shortening the time they can look for a job in their “usual occupation” to six weeks before they risk losing their benefits. They will then have to expand their search to “similar” positions, and after 18 weeks of collecting benefits will have to take any job for which they are qualified, as long as it pays at least 70 per cent of their previous wage.

Even occasional claimants who are eligible for benefits for longer than 18 weeks could have their benefits cut off after this period if they fail to accept a job outside their field that pays up to 30 per cent less.

For example, someone in Toronto who has worked for six years straight after college and never made a claim is eligible for benefits for 42 weeks. However, after 18 weeks on EI, they would be treated in exactly the same fashion as a frequent claimant.

If the regulations are heavily enforced, the system is likely to encourage many first-time claimants – disproportionately young and new Canadians – to shorten their job search and take jobs well below their skill level, robbing them and their communities of the investment we’ve made in their human capital. A downward pressure on wages at the lower end of the labour market is certainly a possibility.

The changes don’t deal with the real problems that have been highlighted with the system. They don’t eliminate regional inequities and create a truly national system. A common national standard would be a simple solution to the problem of frequent claimants not taking available jobs – the problem the government claims it wants to solve.

The changes don’t put new Canadians and young workers on equal footing with other workers. They do nothing at all about the people who are currently left outside the system, workers mostly found in urban areas and disproportionately in Ontario and the West. And the system will continue to tie the vast majority of federal training dollars to EI eligibility, meaning that workers in Ontario will have less ability to upgrade their skills.

The changes do not deal with the real challenges faced by long-tenured workers who may have paid into the system for 20 years without making a claim and will now face a more restrictive system.

The changes are likely to make problems with service standards even worse, given that they make the system more complicated, not less, with more rules to be interpreted and applied, not fewer. It will be harder than ever for workers to understand why they are or are not eligible for benefits. A complex, opaque system has been made more so.

Aggressive intervention to connect frequent claimants with job openings is an appropriate policy response to a real problem in some regions. But the proposed reforms change the system for all workers and do little to address the shortcomings of the EI system faced by young, new and urban Canadians. The federal government has missed an opportunity to modernize a key Canadian social program.

Matthew Mendelsohn is director of the Mowat Centre at the School of Public Policy and Governance at the University of Toronto. The report from the Mowat Centre’s Task Force on Employment Insurance is available at www.mowateitaskforce.ca.

 

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