The Liberals' Employment Insurance shame

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Ten years after the death of Pierre Trudeau, no issue demonstrates more clearly the moral bankruptcy of the Michael Ignatieff-led Liberal Party of Canada than the treatment it just handed out to the Canadian unemployed.

Last week on the eve of a routine House of Commons vote on third reading, Ignatieff announced improvements to Employment Insurance legislation were no longer necessary. As Erin Weir points out, a year ago the Liberal leader was ready to provoke an election over poor E.I. benefits. Now that the unemployment rate has gone from 8.4 per cent down to 8.1 percent he has decided it is wrong to improve the program.

Inspired by suggestions from the Canadian Labour Congress on how to improve circumstances for unemployed and self-employed people, the Bloc had drawn up Bill C-308, which had passed second reading with NDP and Liberal support.

Lacking the courage to vote against Bill C-308, the Liberal leader absented himself from the House of Commons, along with 27 of his members to ensure that Bloc and NDP support for enhanced unemployment benefits would fail (five Liberals voted against, 43 in favour).

While all employed people (and employers) pay E.I. premiums only about 45 per cent of the unemployed actually get benefits. The CLC points out " in 1996, the maximum weekly benefit was $604. Today's maximum is only $435, and the average benefit is just $335 per week."

The Liberals seem to think that a 14 year deterioration in benefits for people who through no fault of their own lose their jobs is no reason to justify action on their behalf.

At the heart of liberalism is the idea that individuals should compete for jobs, and incomes, and that winners should reap material benefits, virtually without limit. The best get their due, and society as a whole benefits. For liberals, astonishing rewards in the form of salaries, and stock option gains make sense because they insure incentives to do well remain central to Canada.

If competition is the engine of the economy, what happens to those left outside the job market? Liberals have argued, since the time Mackenzie King was deputy minister and later minister of labour, over 100 years ago, that the winners need to compensate the losers, otherwise the whole system makes no sense.

It is not enough to ensure everyone should have a chance at great riches, no one should do without either. Pierre Trudeau called this the "just society." His immediate predecessor, Lester Pearson, enacted most of the measures that made up the Liberal commitment to building a just society, in minority parliaments (1963-68) where they needed NDP backing to succeed.

In 1995, the Chrétien/Martin Liberals decided to abandon the national commitment to the destitute by abolishing the Canada Assistance plan, and to use unemployment insurance premiums to reduce the national debt, while denying access to benefits and reducing payouts to more and more of the unemployed. Under Liberal governments the amount of premiums collected exceed benefits paid out to the unemployed by $57 billion.

Not coincidently, after the cuts to U.I. became known, the Liberals went on to almost lose the 1995 referendum on Quebec sovereignty. Bloc members campaigning for the "yes" side focused on unemployment and reductions to U.I. When the results of the 1995 vote are compared to the results from the 1980 referendum, a large swing took place: in areas of high unemployment, former "No" voters voted "Yes."

Bloc members have been getting elected regularly ever since the U. I. program was gutted, and have always focused on the importance of improving unemployment benefits. At the very least, you would think that 15 years later, the Liberals would have figured out that their abandonment of the unemployed helps explain why the Bloc wins seats in Quebec the Liberals used to win.

In 1940, the Liberals introduced unemployment insurance. Seventy years later Ignatieff thinks it is fiscally irresponsible to improve it. He must not understand E.I. benefits are simple transfer payments going from one pocket to another, so that increasing benefits does not mean increasing government spending. All it means is that premiums are used to maintain the purchasing power of people who would otherwise go without.

Since Canada faces deflationary pressures, and enhanced E.I. benefits slow the slide into negative growth, it is Ignatieff's position that is fiscally irresponsible, as well as being morally reprehensible. Taking money from people who save it, and giving money to people who spend it is how you fight deflation, and that is what E.I. does, and would do better if the Ignatieff Liberals had not killed off measures to help people in need.

Duncan Cameron writes weekly on politics and is president of

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