If there is one idea that has informed successive employment insurance reforms since the 1990s, it is that Canadians out of work should move to where the jobs are. Stricter EI eligibility rules have been a major factor in the westward flow of workers from depressed eastern outposts.
Most economists see this as a positive development. An increasingly mobile work force has reduced labour shortages in Alberta while preventing the unemployment rate from spiralling even higher in Eastern Canada . In his departing speech this year, former Bank of Canada governor Mark Carney hailed “the increased sensitivity of provincial population growth to labour market opportunities.” Canada’s labour market, plagued for decades by chronic regional unemployment, is now as “flexible” as that of the United States.
Where some economists see success, however, Conservative Senator Diane Bellemare sees failure. An employment insurance system that encourages the depopulation of the Atlantic provinces and parts of Quebec, she argues, betrays the fundamental pact of Confederation.
“The Canadian government was created by provinces that wanted to give themselves the means to develop,” Ms. Bellemare says in a book to be launched this week. “A strategy involving a ‘big move’ [of workers] goes against provinces’ desire to develop economically and socially.”
In Créer et partager la prospérité (Creating and Sharing Prosperity), Ms. Bellemare argues for giving the provinces full control over EI. While employee and employer premiums would be the same across Canada, each province would be able to set eligibility rules and decide how to split the funds collected between cash benefits for the unemployed and training programs.
A prominent Quebec labour economist, Ms. Bellemare thinks the current EI system has it backward. Canada spends almost three times more on “passive” labour market programs, such as EI benefits, than it spends on “active” ones, such as training. In the Nordic countries, spending on training has long trumped expenditures for benefits, even during the last recession.
Ottawa currently oversees the EI fund, dispensing $17.3-billion in cash benefits to the unemployed in the 2010-11 fiscal year. That compares with the $2.5-billion the federal government transfers annually to the provinces for training programs – about $300-million of which Ottawa now wants to claw back to launch its controversial Canada Job Grant.
The disconnect is such that most workers receiving EI benefits from Ottawa are not even eligible for provincial training programs until they have been out of a job for many months. Ms. Bellemare sees provincial control of EI as one way of closing that gap.
The sooner the better, she argues. Inadequate pensions will require thousands of baby boomers to work well beyond the traditional retirement age. They will be competing with younger Canadians for jobs, underscoring the imperative of continuous training for all workers. “Moving to where the jobs are” simply won’t cut it as a solution to future labour market woes in many parts of Canada.
“I’m for professional mobility, not just geographical mobility,” Ms. Bellemare says. “I’m not against people going to Alberta. But EI does not promote professional mobility.”
You’ll likely be hearing more about that in coming months. A Quebec commission headed by former Bloc Québécois leader Gilles Duceppe is holding hearings on Ottawa’s recent EI reforms, which require many beneficiaries to take jobs farther away from their homes. It’s all but a foregone conclusion the Duceppe commission’s report will call for provincial control of EI, buttressing the Parti Québécois government’s position. With the Quebec public onside, it may be hard for Ottawa to ignore the PQ’s demands.
Having a Conservative senator onside won’t hurt the PQ’s cause either, which makes Ms. Bellemare a curiosity in the Tory caucus. A three-time candidate for the defunct Action Démocratique du Québec, Ms. Bellemare’s public criticism of Stephen Harper’s EI reforms didn’t stop the Prime Minister from appointing her to the Senate last year.
But she arrived in Ottawa on her own terms. She doesn’t do fundraisers. A policy wonk to the core, she embodies the purer aspects of the Senate’s raison d’être as a champion of regional interests and purveyor of sober second thought.
“When I accepted the position it was because I had a cause,” she explains. “Jobs, jobs, jobs.”