EI program: Reform plan is needed

TheStar.com – Opinion/Editorial
Published On Fri Oct 01 2010.

Given the evident slowdown in the economic recovery — the real gross domestic product fell in July, the first monthly decline in almost a year — the federal government did the right thing Thursday in capping increases in employment insurance premiums for both workers and businesses. “We are setting maximums because of our concern, quite frankly, with the fragility of the economic recovery,” said Finance Minister Jim Flaherty.

Indeed, one could argue the government should have gone a step further and maintained a freeze on EI rates. The last thing the economy needs now is a higher tax on jobs.

But EI needs more than an ad hoc intervention on the premium side. It needs a complete overhaul.

The last comprehensive makeover was in 1971, when Pierre Trudeau was prime minister. Since then, the EI program has been gradually whittled down by both Liberal and Conservative governments, so that now a majority of the jobless are not even covered by it.

In Parliament, the Bloc Québécois introduced a private member’s bill to expand EI coverage and increase benefits dramatically. The government complained that the bill would translate into a $7 billion hike in annual costs. The Liberals, after initially siding with the other opposition parties on the Bloc bill, kept enough members away to allow the government to vote it down on Wednesday. The Bloc accused the Liberals of being two-faced on the issue.

Employment insurance is too important a program to be left to such politicking and back-of-the-envelope policy-making. The issue should be handed to a royal commission or some other panel of experts to study and report back within a year with recommendations of how to reform EI to make it both more accessible and sustainable.

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