The Employment Insurance Fund is finally in a surplus position this year, leading to a debate about spending priorities. The federal government is on the record saying they want to cut premiums, even though they are currently at historically low levels. Provinces would like to use the EI fund to increase spending on training, something the labour movement has long called for as well.
Both of these positions ignore the fact that fewer than 40 per cent of unemployed workers can access EI at all. In some areas, such as Toronto, that falls to 20 per cent. The first priority for Employment Insurance must be to increase access. There are several reasons why access is at an all-time low. The prevalence of temporary, part-time and contract jobs make it difficult for workers in urban areas to work enough insurable hours during the qualifying period. Some workers have exhausted their benefits before finding work, and others are affected by changes to EI for workers in seasonal industries.
Canadians' well-being during tough times relies on a robust safety net. Employment Insurance is called an "automatic stabilizer" because it kicks in when workers and communities need it the most. Employment Insurance helps workers make ends meet, and softens the blow for communities hard hit by mass layoffs such as those at Target.
The federal government has made it harder to access EI, has cut front-line staff so that there is no one to answer questions or provide advice, and added an extra level to the appeals process creating delays and discouraging many from even trying to access benefits.
If workers had their say about how to allocate Employment Insurance funds, it might look a little like this:
1. Most unemployed workers are new labour market entrants, or are returning to the labour market after a year or two away. These workers have to accumulate 910 insurable hours of work before they qualify for any income assistance or training benefits. For part-time workers, this could mean they would need more than a year of employment under their belt to access the insurance they've paid into. Imagine a father who has put in 900 hours of work before being laid off at Target, and now must turn to social assistance and food banks, rather than being able to access the supports and services he needs. The solution to this is a single national entrance requirement for EI, eliminating the extreme hurdle for new entrants and re-entrants.
2. The Bank of Canada has shown concern about the high number of workers who have been unemployed for long stretches. Many workers exhausted benefits without finding a new job, and are often excellent candidates for training supports. Another priority could be to extend income support to workers who choose to engage in retraining through EI.
3. Rehire front-line staff to help workers and employers negotiate the EI system, and eliminate backlogs in applications and appeals. Remove barriers facing advocates at Unemployed Worker Help Centres across Canada, as they seek to help vulnerable unemployed workers access the system.
4. Finally, we urgently need expanded opportunities for training, and increasing EI funds available for training is one way to do that. But on its own, that won't be enough. According to the Conference Board of Canada, employer investment in training has fallen by 40 per cent since 1990. Without some kind of a carrot (or stick) from legislators, it is likely that Canadian employers will continue to underinvest in training, opting instead to "poach" talent from competitors and other countries. Quebec has avoided this free-rider problem and created a level playing field by requiring employers with total payrolls of $1-million or more to allot at least 1 per cent of total payroll to qualifying training programs. If a company fails to spend 1 per cent of its payroll on training programs, it must pay the difference into a public training fund. Polling done last month for the Canadian Labour Congress shows overwhelming support in Canada for a 1-per-cent training investment levy, and the support extends to all regions, age groups, income brackets and party affiliations.
The short story is that (un)Employment Insurance isn't working for workers. The solution isn't yet another tax cut. A few key changes would allow EI to meet the needs of employers, workers and the economy as a whole. It`s time for a real debate about the important role (un)Employment Insurance plays in our economy, and the need to properly finance our social safety net so that it's there when workers need it.
Angella MacEwen is senior economist at the Canadian Labour Congress and a fellow with the Broadbent Institute.