Social Policy in Ontario

Jobless rate shows EI reform needed

Posted on February 8, 2009 in Debates, Social Security Debates

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TheStar.com – Opinion/editorial – Jobless rate shows EI reform needed
February 07, 2009

With the loss of 129,000 jobs across Canada in January – a record for a single month – the spotlight has returned to the federal stimulus package and whether it goes far enough to address the current crisis.

The $35 billion package, released as part of the federal budget on Jan. 27, contains some funding to help the jobless by enhancing skills training and extending Employment Insurance benefits for an extra five weeks.

Unfortunately, however, a majority of unemployed Canadians are not eligible for Employment Insurance, often because they work on contract or part-time or in seasonal jobs that don’t last long enough for them to qualify.

The problem is particularly acute in Ontario, where only three in 10 unemployed persons qualify for Employment Insurance.

This discrepancy may have been tolerable when the Ontario economy was booming and the unemployed could easily find work. But Ontario is now the epicentre of the economic earthquake. Most of the jobs lost across the country last month were in Ontario, which saw its unemployment rate jump to 8 per cent as a result. That is higher than the national average (7.2 per cent) and higher even than its historically weaker neighbour, Quebec (7.7 per cent). Now only the Atlantic provinces have higher unemployment rates than Ontario, but the gap is narrowing.

The Ontario government, labour leaders and the former coalition of opposition parties in Ottawa had all been calling for an easing of eligibility requirements for Employment Insurance in the Jan. 27 budget. They were disappointed it was not included in the stimulus package, although the government did find money for such gimmicky items as the $1,350 tax credit for home renovations.

The calls for change in Employment Insurance rules were renewed yesterday by the opposition in the House of Commons. They were met with bafflegab from Human Resources Minister Diane Finley.

But in a newspaper interview a few days earlier, Finley revealed her true feelings. “Our goal is to help people get back to work, and get back to work quickly in jobs that will last,” she said. “We do not want to make it lucrative for them to stay home and get paid for it, not when we have significant skills shortages in many parts of the country.”

The problem with this sort of Darwinian thinking is that the supply of work is not enough to meet the demand for jobs, as yesterday’s unemployment figures show. Making it easier to qualify for Employment Insurance would help many more of the unemployed bridge the recession until the work returns.

Finance Minister Jim Flaherty raised hopes of a shift in this direction on Thursday when he said the government was “open” to changes in its stimulus package. But Prime Minister Stephen Harper dashed those hopes yesterday. “We will not be blown off track very time there is some bad news,” he said.

The alternative to fixing Employment Insurance is to drive the jobless onto the welfare rolls (the responsibility of provinces and municipalities) or to force them to plunder their assets such as homes and retirement savings. Neither option is desirable.

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