COLUMN: Gunter – Flaherty looks to fix the welfare of E.I.

- May 22nd, 2012

Focus on chronic EI users

By: Lorne Gunter

Earlier this week, a column I wrote on proposed changes to the Employment Insurance (EI) scheme appeared nationally and prompted more than 300 e-mails, almost all of them critical, nearly all from Ontario and almost all with the same message:

“I’ve paid into EI my entire career. Now that I find myself unexpectedly unemployed, I deserve a short period of help. And I shouldn’t have to move or take a lesser job just to continue to receive benefits.”

That wasn’t my point. I wasn’t arguing that first-time or infrequent EI claimants should be compelled to uproot their families or flip burgers. Rather, I was asserting that there are far too many claimants who claim all the time and never pay enough premiums to cover the months and months of benefits they receive.

Caveat

So let me begin this follow-up with a caveat: If you’ve paid into EI all your working life and now find yourself out of work, you shouldn’t have to apologize for taking benefits. The system is working exactly the way it should — for you.

The problem is, for tens of thousands of Canadians — some years as many as half of claimants — EI is a federal welfare program rather than anything resembling an insurance plan.

That’s why I think federal Finance Minister Jim Flaherty was on to something when he suggested this week that EI rules should be changed to make it harder for people to collect if they refuse to move to find work or if they refuse to take local jobs they feel are beneath them.

It should be possible to solve the problem of chronic overuse of EI without harming the real benefit the plan provides.

Victim of recession

For instance, the Tories could say the requirement that claimants move does not pertain if you have not applied for benefits in the previous 10 or 15 years. If you’re a victim of the recession, you’re covered.

But if you are applying for EI for the third, fourth or even fifth time in the past decade, and you live in a region with habitually high unemployment, maybe you should be prompted to move or take up a new line of work.

For this latter group, EI is not insurance, it’s welfare.

Consider this, not only does it take much longer to qualify for EI in some regions (700 hours of work versus 420), there are other regional biases built in. So, only about one quarter of out-of-work Albertans ever qualify for EI, no matter how many years they have paid in — and only about one-third of Ontarians — whereas in most of Atlantic Canada and rural Quebec, 90% of applicants are successful.

(It is important to note that it is almost as difficult to qualify in Halifax and Quebec City as it is in Edmonton and Calgary.)

Wealth transfer

So I stand by my earlier contention that in much of the country, EI is not an insurance plan but rather an interregional wealth transfer.

But that kind of applies in Ontario, too.

A large part of the reason Ontario is underperforming economically (and losing jobs) is that the provincial government of Premier Dalton McGuinty has no clue how to spur growth.

Ottawa’s budget deficit this year is expected to be $21.1 billion, Ontario’s will be a staggering $15.3 billion, greater than the deficits of the other nine provinces combined. The cost of servicing Ontario’s $238-billion accumulated debt is $10 billion annually, the third-largest expense in the provincial budget and more than the provincial government spends on colleges and universities.

Add soaring electrical power rates from a failed green-energy plan and you end up with a lot of Ontarians out of jobs who shouldn’t be.

Categories: Contributor Columns

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1 comment

  1. peter brady says:

    Not mentioned is the cost of running the whole E.I. show.
    Tens of thousands employed in the administration of the system.

    Do away with it completely, and throw the welfare programs down the drain also. Replace with a “taxable heritage cheque”.

    Those Canadians (over 18 years of age still in school –otherwise they wait until 21 y/o.) born here of at least one Canadian parent receive the stipend. High income earners have their stipend taxed off.

    Let established offices in Rev Canada run the (guaranteed income) department.

    Sound expensive? Not nearly as expensive as the whole social benefit industry costs the country. Guaranteed Income Program; It’ll save us a mint!

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