Social Policy in Ontario

McGuinty wants equal EI pay for Ontario workers

Posted on February 23, 2008 in Debates, Social Security Debates

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TheStar.com – Ontario – McGuinty wants equal EI pay for Ontario workers
February 23, 2008
Laurie Monsebraaten, Staff Reporter

Premier Dalton McGuinty wants the federal government to use next Tuesday’s budget to fix a problem that is keeping $1.7 billion out of the hands of Ontario unemployed workers.

But the chances are it won’t happen, despite a $50 billion surplus in the Employment Insurance program. McGuinty has been vociferous in complaining about how Ontario’s unemployed workers are treated differently than those in other provinces.

Vykunmthanathan Chelliah is a perfect illustration of that.

Chelliah is one of 400 factory workers who lost their jobs when auto parts manufacturer Collins & Aikman Plastics Ltd. closed its Scarborough plant last summer.

Eight months later, and with no full-time job in sight, the father of two with 18 years of service at the plant doesn’t know how he’ll support his family when his employment insurance runs out this spring.

The only offers he has had are from temporary employment agencies with unreliable hours, no benefits and low pay – a far cry from his former union job with security, benefits and wages that supported his family’s middle-class lifestyle.

If Chelliah, 55, lived in Atlantic Canada, where regional unemployment rates are higher, he’d get EI coverage until next fall. It would buy him more time to brush up on his English and give him a better crack at landing a full-time job with benefits.

Because of changes made by the federal Liberal government in 1996, it is much tougher for Ontarians to collect EI when they lose their jobs, and their benefits run out sooner than in other parts of Canada.

McGuinty says that the average unemployed worker in Ontario last year received $5,110 in EI benefits, compared to an average worker in the rest of Canada who received $9,070. The difference amounts to about $1.7 billion for Ontario’s 450,000 unemployed.

McGuinty wants unemployed workers in Ontario to be treated the same as workers in other provinces, but, sources say, he has been given a flat no by the federal government.

Less than one-quarter of unemployed workers in the Toronto area receive EI, although most of them have paid into the federal program that is supposed to provide income and training support while they look for new jobs to match their skills. Across the province, just 36 per cent of those out of work are getting help from EI.

The proportion of unemployed workers covered by EI in Canada has plummeted from more than 80 per cent in the early 1990s to just over 40 per cent today. But in Ontario, where well-paying manufacturing jobs are being replaced by low-wage, part-time, temporary and service-sector employment, workers are reeling.

“EI is Canada’s most important income support program for workers and yet most unemployed workers today can’t access it,” said CAW national representative Laurell Ritchie, a member of the Canadian Labour Congress’ Employment Insurance Committee.

And if you are ineligible for EI benefits, you can’t take advantage of EI-supported training programs that are crucial to helping workers adjust to a changing economy, she added.

Eligibility has always been based on regional unemployment rates and the amount of time worked in the previous 52 weeks. But the stricter requirements introduced in 1996, coupled with a rise in temporary, part-time and contract work, have conspired to shut out more workers, critics say.

“If you have lost your job, it shouldn’t matter which part of the country you live in,” Ritchie said. “Everyone should have the same access to EI regardless of regional unemployment rates.”

EI critics also oppose the rules that require new entrants or re-entrants to the workforce – young people, immigrants and those who have been out of the labour force for an extended time studying or raising a family – to work more hours before qualifying for benefits.

In Toronto, for example, a new entrant has to work 910 hours before qualifying, while someone with a longer work history needs to clock just 665 hours.

“These requirements discriminate against some of our most vulnerable workers,” Ritchie said.

Toronto social policy expert Marvyn Novick says tougher restrictions governing EI have pushed many unemployed workers onto welfare and into poverty.

“Compelling people to use social assistance is compelling them to define themselves as people in poverty,” he said.

“It’s not just an issue of income adequacy and helping people, there is a dignity issue. I don’t think people realize that.”

With the stigma attached to welfare, most unemployed workers would rather take low-wage, temporary work if they can get it rather than hold out for something better.

“The EI erosion is really part of a strategy of getting people to accept poor jobs,” Novick said.

“I think we have to end that by moving to a good jobs strategy, sustaining employment and giving people the support they need when they are looking for suitable employment.”

Chelliah, who earned about $60,000 in salary and overtime, operating a robot that paints dashboards and other auto accessories, paid university tuition for his two sons last year.

“This year they had to apply for OSAP,” he said, referring to Ontario’s student loan program.

And even though his wife is now working as a part-time nanny to help make ends meet, the family is quickly depleting its savings.

Many social justice and labour advocates want Ottawa to reform EI and have suggested cutting qualifying hours to a uniform 360 across the country, among other changes.

A bill before Parliament last fall, and supported by all three opposition parties, would have cut EI qualifying time by 70 hours in all regions; eliminated the two-week waiting period; raised maximum weekly EI benefits to $497 from $423; and increased the maximum duration of benefits to 50 weeks from the current 45. Stephen Harper’s Conservative government blocked the bill.

Others, like the Caledon Institute of Social Policy, think EI is beyond repair and want to see it replaced with three new programs:

A federal income-tested benefit funded out of general revenues to cover all workers experiencing temporary unemployment;

A provincial income and training program for the unemployed who need skills upgrading,

A basic income for working-age adults unable to work due to age or health problems paid by Ottawa.

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