The Conservatives are telling Canadians that social programs must change because society is changing. That’s why they want to reform Old Age Security. So why not Employment Insurance?
As a recent report by the Mowat Centre, an Ontario-issues think tank, makes plain, today’s $22-billion EI system is “unprincipled and incompatible with the modern Canadian economy.” It penalizes long-term workers who suddenly lose their job and rewards workers who become unemployed routinely.
And it props up employers who fail to modernize and compete by subsidizing their workers’ incomes, which punishes firms that invest to become more productive.
The solution, according to the report, is to establish a uniform set of rules for everyone everywhere, returning EI to its traditional role of job insurance, rather than the welfare program for chronically depressed regions that it has evolved into.
Such a reform would be both more fair and better for the economy. And yet there is no word, or even rumour, of Conservative plans to reform EI. It’s a puzzlement.
Right now, the Employment Insurance formula divides the country into 58 regions. How many hours people must work to qualify for EI, and the minimum and maximum number of weeks they’re entitled to benefits, swings wildly from region to region, depending on its level of unemployment.
One simple example: If you live in eastern Nova Scotia, 420 hours of work qualifies you to receive benefits for at least 36 weeks. But if you live in parts of Southwestern Ontario, you need 700 hours, and you can be cut off after as little as 14 weeks.
Is that because finding a good job in Southern Ontario is easy? Tell that to hundreds of thousands of workers who have been stripped from the province’s manufacturing sector over the last decade.
In fact, as the Mowat report points out, “an individual in a low unemployment region with a deteriorating job market almost certainly has worse job prospects than an individual in a high unemployment region with an improving job market.”
Add it all up, and you get what we had in 2010: Almost every person in Prince Edward Island who was unemployed was on EI, while less than 40 per cent of the unemployed in Ontario were receiving benefits. Federal programs continue to treat Canada’s largest province as the land of milk and honey, even though large swaths of it are turning into a Bruce Springsteen song. Last December, Ontario’s unemployment rate was 7.7 per cent. Nova Scotia’s was 7.8 per cent.
A system that treated each jobless worker equally regardless of the local environment would encourage labour mobility and improve productivity. No wonder Saskatchewan Premier Brad Wall damns the existing system as a “huge disincentive against getting people to go where there is a job. The principle infused into this ought to encourage people to go where the work is.”
EI reform would also, one can’t help noticing, benefit workers in Ontario and the West, while reducing benefits for workers in Quebec and Atlantic Canada. Which parts of the country vote Conservative and which parts don’t?
And yet when asked Tuesday whether the government was planning changes to EI, a Human Resources spokeswoman would say no more than this: “We are always reviewing the EI program to ensure it is fair for Canadians in need of benefits.”
Maybe the Conservatives feel that punishing the poorer regions of Canada by scaling back EI benefits would look bad. Maybe they are keeping their powder dry for pension reform.
Whatever the reason, reforming employment insurance so that all workers are treated equally, however much it would benefit the economy, is a can the Tories appear to have kicked down the road.
Unless, of course, there’s something they’re not telling us.