Social Policy in Ontario

Ottawa looks to speed up EI reforms as job losses mount in West

Posted on January 22, 2016 in Debates

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TheGlobeandMail.com – News/Politics
Jan. 21, 2016.   Bill Curry, Ottawa

The federal government is looking to speed up promised reforms to employment insurance with legislation early in the new session, as job losses mount in Alberta and Saskatchewan due to the fall in commodity prices.

Liberal campaign promises to deliver a more generous EI program are taking on a greater sense of urgency after the Bank of Canada warned this week that the shifting economy is delivering a direct and personal toll on Canadians.

Statistics Canada reported that the number of EI beneficiaries was up 45,800, or 9.2 per cent, in November over the same period a year earlier. About two-thirds of this increase was in Alberta.

In an interview with The Globe and Mail, Employment Minister MaryAnn Mihychuk said the government will act quickly on its promised reforms. Specifically, she said Ottawa wants to address the fact that the percentage of Canadians who qualify for EI when they lose their jobs has slipped below 40 per cent.

“People are paying for insurance but don’t qualify to get it, so that’s a whole necessity and we’re working very hard on that,” Ms. Mihychuk said.

The minister noted that the EI program adjusts automatically to rising regional unemployment, but the government is open to further changes if necessary.

“We’re always open to looking at what Canadians need to deal with the situation, but we’re also cognizant of the fiscal reality, so it’s a difficult balance. We’ll see how that’s going to roll out in the budget,” she said.

Action in the upcoming federal budget on employment insurance would be welcome news, said Alberta Finance Minister Joe Ceci.

“Changes to EI, length of time to receive and training, all of those would be welcome,” said Mr. Ceci, who is also preparing a provincial budget focused on stimulus. “We want to take advantage of skilling up people when they have the opportunity, when they are looking for ways to develop their own capacities for the opportunities that are coming. So that would be important. It’s an investment in our human capital.”

When the federal government released a stimulus program in the 2009 budget, during the global financial crisis, the package involved more than just infrastructure spending. It also included tax cuts and temporary changes to EI that allowed for more generous and longer-lasting benefits for out-of-work Canadians.

Calls from Alberta for more generous labour support illustrate the dramatic reversal of fortunes in the Canadian economy. Some of the measures in the 2009 package were specifically targeted toward the manufacturing sector, with a specific focus on saving auto jobs in Ontario.

The sharp downturn in the price of oil and other commodities is influencing the flow of workers across the country. While Alberta has long been a magnet for labour, the trend is now shifting in the other direction.

Interprovincial migration to Alberta in the third quarter of 2015 was at its lowest since 2010, while Ontario registered the largest inflow if workers from other provinces since 2002, according to a report this week from the Bank of Canada.

Infrastructure Minister Amarjeet Sohi said Thursday that Ottawa would be prioritizing renovations of existing infrastructure over the next two years in an effort to quickly provide short-term stimulus, while reviewing larger, long-term projects.

The Liberals are also counting on new personal income tax changes to boost growth. The Parliamentary Budget Officer issued a report Thursday confirming that revenue from a new rate on the wealthiest taxpayers will fall far short of covering the cost of a middle-class tax cut.

Prime Minister Justin Trudeau’s mandate letter to Ms. Mihychuk suggests significant changes are coming to the EI program.

The Employment Minister has been asked to undertake “a broad review of the EI system.” Specific changes the government is looking at include reducing the wait time for new recipients from two weeks to one week and working with labour unions to fund training facilities.

Liberal MP Steven MacKinnon, who is expected to sit on the House of Commons finance committee, said the government is looking at EI reform as it prepares the federal budget.

The former Conservative government’s 2009 stimulus budget provides examples of the kind of short-term measures that could be adopted during a downturn. For instance, a measure was included that added five extra weeks to EI payments at a cost of just more than $1-billion. That budget also increased spending on training, spreading the money in a way that was weighted in favour of provinces with the highest unemployment rates.

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

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