Addressing training needs through EI is critical

WindsorStar.com – business
February 12, 2011.   By Marion Overholt, The Windsor Star

The Mowat Centre for Policy Innovation has effectively demonstrated that Ontario’s unemployed residents received less employment income and fewer retraining dollars than other regions of Canada in this current recession. Their report, Help Wanted: How Well did the EI Program Respond During Recent Recessions, should be mandatory reading for Ontario politicians.

The report reveals that, in spite of an increase in Ontario’s unemployment rate -the fourth highest in Canada at 8.2 per cent -only 40 per cent of its unemployed residents were eligible to collect benefits. These figures stand in sharp contrast to Newfoundland and New Brunswick where more than nine out of 10 unemployed collect benefits.

Although Ontario workers and employers have paid into the employment insurance system, the EI rules redistribute benefits in an inequitable manner. The rules divide Canada into 58 regions. In regions where there is chronic unemployment and seasonal work, benefits are easier to access and paid out for longer periods of entitlement.

When Ontario’s manufacturing sector shed jobs, employment insurance rules were inflexible and unable to respond quickly to a vastly different job market. Furthermore, the artificially defined regions meant workers laid off at the same Windsor factory qualified for a different benefit period depending on whether they lived in Tilbury or Windsor.

When we look at retraining, again Ontario did not get its fair share. While the federal government through EI Part 11 spent an average of $1,042.70 on training per unemployed person in Ontario, an average of $2,243.95 was spent per unemployed person in the rest of Canada. It is incredibly important because the structural change in our economy means that, more than ever, retraining is a necessary step in the path to re-employment and restoration of our taxpayer base.

For some unemployed workers, the route to sustainable employment will only be found in training and upgrading.

Windsor and Essex County have fewer high school and post-secondary school graduates than the rest of the province. In 2007, Human Resources and Skills Development Canada projected that, by 2010, 75 per cent of all new jobs created will be highly skilled and that only six per cent of jobs will be open to those with less than a high school diploma.

Addressing training needs through employment insurance is critical if our workforce is to successfully transition to the new economy.

Although there are some signs that the unemployment situation in Ontario is improving, the growth has largely been in the part-time sector and those workers, although paying into the system, will be unlikely to meet the threshold of eligible hours in order to qualify for benefits.

This matters to both Ontario and municipal governments because unemployed workers who can’t find work often end up on Ontario Works assistance. In order to qualify for Ontario Works, workers are required to spend down their savings, RRSPs, etc., to effectively strip themselves of any excess assets in order to qualify for inadequate benefits of approximately $590 for a single person a month. Their poverty becomes an additional roadblock to rejoining the workforce and taxpayer status. They also become a financial burden for municipal and provincial governments struggling to balance budgets despite a loss of revenue.

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