Coming out of the Liberal convention, Michael Ignatieff declared he was ready to put concrete proposals on the table to reform employment insurance. Hold the applause. The last Liberal reform, in 1995, transformed unemployment insurance (UI) into employment insurance (EI), and created the injustices that need to be fixed today. For instance, under EI, 60 per cent of newly unemployed Canadians no longer receive benefits, compared to only 20 per cent that were turned down under the old UI program.
If the Liberals wanted a genuine social insurance scheme to protect the unemployed from jobs lost through no fault of their own, the majority in the House of Commons could make it happen. But, the Liberal leader did not say he was going to work together with the Bloc and the NDP to bring changes to a program that cheats the unemployed out of benefits they have paid premiums in order to receive. Nor did he put the Conservatives on notice: change EI, or face defeat in the House of Commons.
Instead the Liberal leader called for an independent review, which is surprising, considering UI/EI is a candidate for the most studied program in the history of Canada.
The Canadian Labour Congress (CLC) does not need a review to know that EI is broken. The CLC wants a major reform including permanent improved access to EI through reducing qualifying hours to 360 hours (or about 10 weeks) for all jobless, no two-week waiting time before receiving a cheque, and higher weekly benefits.
The CLC chief economist, Andrew Jackson has pointed out that eligibility for benefits needs to be greatly extended. Those who have exhausted benefits (on average after 30 weeks) are going to be growing in number, worsening the economic outlook across Canada, as well as making lives worse.
At present the thousands refused EI every day, along with those who exhausted their EI benefits, must apply for provincial welfare. This adds to budgetary pressures at the provincial level, and leads to misguided attempts to reduce provincial employee salaries and government spending programs. These cuts worsen the economic downturn, since government spending drives the economy.
Sending the unemployed to the welfare office makes lives worse as well as hurting the whole community. Would-be- welfare recipients have to empty their savings accounts before becoming eligible for a welfare cheque.
First make yourself destitute — that is public policy in Canada for someone who wants access to welfare. And, yet, we encourage the still employed to save by sheltering their income from tax when they contribute to an RRSP, or a company pension plan. Why should the unemployed not be allowed to keep their savings?
The Canadian Centre for Policy Alternatives did in-depth studies tracking B.C. welfare recipients over several years. The SSHRC funded research found that an amazing 50 per cent of B.C. applicants for welfare were turned down.
Until the federal Liberals changed the rules in the 1995 Martin budget, that also reformed UI, the provinces were required to treat welfare as a universal right if they wanted federal transfer payments, which until that budget, paid 50 cents of every dollar spent by the provinces on welfare.
The Liberals gutted UI, and have yet to admit they were wrong to do it. Deputy Finance Minister (and later Bank of Canada Governor) David Dodge, chartered bank economists, and the C.D. Howe Institute successfully peddled the idea that unemployment was voluntary. People supposedly preferred UI to paid work, leisure to a job.
Today Jean Chrétien, Paul Martin, David Dodge and Ignatieff should be asked: do they think the working men and woman at General Motors, Chrysler, Ford, Stelco (now U.S. Steel), Nortel, Abitibi Price, Bowater, Alcan and the thousands of others who have become unemployed laid themselves off? Or is Canada experiencing an outbreak of laziness, and not a recession?
Last Friday at the Vancouver convention, Chrétien crowed to an appreciative audience how Liberal “fiscal responsibility” had turned Conservative deficits into Liberal surpluses. What the former prime minister did not divulge was how he, Martin and Dodge raided the old UI fund for $10 billion per year. Their EI reform reduced payouts to the jobless. Thanks to the money stolen from the unemployed, the deficits became surpluses. This is fiscal responsibility?
What the supposedly fiscal responsible Liberals also neglect to mention is how the social deficit went up as unemployed workers turned to welfare, and governments, notably in Ontario, B.C. and Alberta, turned people away, sending them onto the streets. Where do the Liberals think the homeless crisis came from if not from their version of fiscal responsibility?
What Ignatieff said in his closing press conference was that he wanted to equalize access to EI across Canada. The Liberals would reduce to 360 hours the number of hours worked needed in order to qualify for EI irrespective of where you live, but only “temporarily.”
In other words, once the Ignatieff Liberals decide to fight the deficit, the temporary rules will be shelved, and Canada will go back to the Liberal EI system that blames the unemployed for unemployment.
Duncan Cameron writes from Vancouver.
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