Social Policy in Ontario

EI cuts are another blow to the jobless

Posted on April 10, 2013 in Policy Context

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TheStar.com – opinion/commentary – A cut in employment insurance benefits, buried in last year’s massive omnibus federal budget bill, took effect Sunday. Thousands will be hurt.
Apr 10 2013. By: Carol Goar

Just when it seemed safe to put Jim Flaherty’s surprise-loaded 2012 budget behind us, it delivered a nasty aftershock.

Labour activists knew it was coming, but most Canadians didn’t. Buried in last spring’s 425-page omnibus budget legislation was a change in employment insurance (EI) rules that will hurt thousands of laid-off workers. It took effect on April 7.

Unions and community groups pleaded with the government not to implement the measure. They failed. So last Sunday, employment insurance benefits in two-thirds of the country were quietly reduced. Existing recipients were spared but new EI claimants — starting with the 54,500 workers who lost their jobs in March — will be subject to tougher rules. Most will get less support.

Generalizations are impossible. The impact on any person depends on his or her employment record, skills and the health of the local job market. But by and large, EI applicants in Oshawa, Windsor, Hamilton, the Niagara region, Sudbury, Halifax, Montreal, Winnipeg, Regina and Vancouver will fare worse under the new rules. (The effect in Toronto will minimal because EI claimants here never received the same benefits as their counterparts in the rest of the country.)

Employment insurance rates are set by formulas so complex they defy explanation. But the essence of this change is that the government has pushed the threshold to qualify for the most generous form of EI treatment out of reach for most Canadians.

Until Sunday anyone living in a region with an unemployment rate above 8 per cent was eligible. Now the benchmark is a 13.1-per-cent jobless rate. Only a handful of regions qualify: parts of Newfoundland-Labrador, eastern Nova Scotia, Gaspésie, Restigouche, northern Manitoba, northern Saskatchewan, Nunavut, Yukon and the Northwest Territories.

Under the old rules, laid-off workers in most regions could use their best 14 weeks of earnings when submitting their claim. This allowed them to omit weeks when the plant was idle or their hours were sporadic.

Under the new system, only a tiny minority of workers can use this device. The rest must use the number of weeks Ottawa sets. In Windsor, for instance, it is 18. In Oshawa, it is 19. In Toronto it’s 20. The larger the number is, the harder it is to filter out temporary layoffs and lean weeks.

The losers will be call centre workers and hotel/hospitality workers and factory workers with unpredictable, unsteady hours. The winners are employers and the government (which raised EI premiums despite reducing benefits).

Most laid-off workers don’t know what’s going to hit them.

They probably won’t find out until they compare their EI benefits with those of friends, neighbours and former colleagues who lost their jobs a couple of months ago. They’ll have no ground to appeal or challenge the obvious inequity.

Ironically, Flaherty’s objective was to make the EI system more equitable, a goal shared by Canadians and the Ontario government. They envisaged a uniform rate structure that would boost benefits for everyone. What the minister delivered was a plan to lower them.

It was equity of a sort — a stingy sort.

Sunday’s rule change was the government’s latest move toward a “flexible labour” agenda. It came on the heels of a crackdown on EI recipients last month to ferret out “false and inappropriate claims.” Federal officials made unannounced house calls, grilling recipients. The month before, the government imposed a requirement that repeat EI claimants accept any job in a 100-kilometre radius that paid as little as 70 per cent of their previous salary.

No doubt these measures will sharpen the private sector’s competitive edge. But they will drive down wages and make it harder for workers who lose their jobs to recover.

These trade-offs have far-reaching consequences. Over time, they will erode Canada’s standard of living and reduce the resilience of its workforce. All Canadians — even those with ostensibly secure jobs — need to pay attention.

< http://www.thestar.com/opinion/commentary/2013/04/10/ei_cuts_are_another_blow_to_the_jobless_goar.html >

Tags: budget, economy, ideology, poverty, standard of living

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