Tories to boost long-term worker benefits

Posted on September 12, 2009 in Debates, Governance Debates, Social Security Debates – Politics – Tories to boost long-term worker benefits: Tailored to undermine Liberal, EI upgrades would stop treatment of severance as earnings.
Sep. 11, 2009.   Heather Scoffield, The Canadian Press.

The federal Conservatives are set to introduce employment insurance enhancements that could change the treatment of severance packages and help laid-off long-term workers find jobs more quickly, The Canadian Press has learned.

Human Resources Minister Diane Finley is expected to table new measures as early as next week, with a package designed to undermine the Liberals’ pre-election campaign to reform EI and burnish the Tory image of being good economic managers.

The Conservatives are eyeing measures that would stop the treatment of severance packages as earnings; extend benefits for those who have paid into the EI system for years; or offer “wage insurance”– a topping-up of benefits for laid-off workers who are reluctant to take a new lower-paid job.

Moving expenses are also in play, in the hope of helping unemployed people relocate easily to find work. Maternity and paternity benefits for self-employed workers have also been under consideration.

“It is a priority for our government when the House returns,” said Ms. Finley’s spokesman, Ryan Sparrow.

The government used ramped-up election speculation to announce recently that it would present a package of EI reforms targeted at long-tenured workers. But the announcement did not include any details.

Ms. Finley is relying heavily on advice handed to her in a task force report on older workers, prepared last year for her predecessor Monte Solberg. While that report was published during better economic times to help Ottawa deal with labour shortages, it contained a detailed critique of how older workers use employment insurance and offered practical suggestions for improvement.

Those suggestions form the basis for some of Ms. Finley’s package this fall – a package meant not only to improve the EI program but also to undermine the Liberals’ central complaint about Tory policy to ease the recession.

Specifically, the 2008 report recommended that:

– Severance payments should not be treated as earnings that can be used in place of EI benefits. That way, new claimants could start collecting EI benefits after a two-week waiting period, instead of being forced to wait until their severance runs out.

– Wage insurance should be offered to long-tenured workers so that they’re not deterred from taking a new job that pays less than their old position. The top-up in pay would last for about two years, and would put people back to work more quickly.

– Long-tenured workers who have paid into EI for years without collecting should be able to collect benefits for an extended period, regardless of the regional unemployment rate that currently drives benefits.

– The government should provide moving assistance so that unemployed people can find new jobs away from home. For now, moving expenses get special tax treatment, but not until well after the moving bills have been paid.

Key to the costing of the Tory proposal is the definition of long-tenured workers. The task force report suggested workers should qualify for the special benefits if they have been in a job for 10 years and have not tapped into EI in the last five years. But if the government makes qualification more stringent, it could cut its costs.

Officials from the Finance Department said funding for the new EI initiative was embedded in Finance Minister Jim Flaherty’s fiscal update this week. But they declined to provide cost details until after Ms. Finley introduces the package later this month.

“This is a great beginning,” said Erminie Cohen, a former Conservative senator from New Brunswick who led the task force.

The changes to EI for long-time employees are probably the quickest and easiest ways for the government to act on her report, she said. But she also urged Ottawa to pay attention to the rest of the report that recommended a constant and thorough review of EI, as well as measures to keep older workers in the workforce.

Targeting long-tenured workers has some key benefits for the Tories’ electoral fortunes. The package would mainly help laid-off workers in the auto, forestry and manufacturing industries, where job losses have been heavy in the last 10 months. Those sectors are also often based in areas ripe for Tory votes, such as southern Ontario and rural Quebec.

Long-tenured workers are usually older workers – another prime constituency for the Conservatives.

And while the Tory plan does not resemble the Liberals’ proposals, opposition members would have a hard time arguing that long-tenured workers who have lost their jobs don’t need special attention, said Don Drummond, chief economist at Toronto-Dominion Bank.

“I’d have a hard time disagreeing with any of those measures.”

It’s not clear, however, that the EI proposals would serve to avert an election.

The New Democrats say the Tories have not made any attempt to win their support, but they would have to look hard at supporting an EI package if it truly helps ease the pain of recession. NDP support of a Tory plan would allow it to pass through the House.

“We’re certainly willing to hear what they have to say,” said spokesman Rick Boychuk.

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