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The Progressive Economics Forum

EI Woes

The latest changes to EI to be introduced by the Conservatives do almost nothing for the shock troops of the labour market, those who were first felled when the recession hit last year.

Bill C-50 will pass – whether or not it is fast-tracked today or “well-considered” in committee depends on how the procedural tactics imbedded in the bill are handled by all of the opposition parties – but it is a resounding bust for those whose benefits are due to run out just about now.

It didn’t seem that way just a couple of days ago.

On the first day back after Parliament’s summer break, in a political climate utterly bursting with triggers for another election, Minister Finley promised improvements in EI for unemployed long-tenured workers, up to 20 weeks of additional support for those who met the new qualifications. The announcement suggested retroactivity of these measures, so they would line up with the rest of the government’s “Economic Action Plan”, the Conservative’s belated response to the worst economic downturn to hit Canada since the Great Depression.

The government drew a clear (and spurious) line between which of the unemployed were worthy of additional help during a period of economic crisis and which were not. But at least it seemed to be a clear line: people who had paid premiums for at least 7 out of the last 10 years, and who had not asked for more than 35 weeks of help in the previous five years.

A lot of people breathed a sigh of relief.

Many thousands of people who worked most of their lives before they got laid off have already run out of benefits before finding that next job in their community. Many more are about to run out.

Everyone is looking over their shoulder. According to the Canadian Payroll Association’s annual survey, the majority (59%) of Canadians with jobs report they would have trouble making ends meet if their paycheque was delayed by even one week. http://www.newswire.ca/en/releases/archive/September2009/14/c4808.html

So Finley’s announcement – even if long-overdue and seriously limited in its scope – was welcome.

Most people don’t bother reading legislation. Excerpting just one clause from the bill shows why:
“Despite section 225 of the Budget Implementation Act, 2009, if a claimant is a claimant referred to in subsection 55(7) of the Employment Insurance Regulations who was paid less than 36 week of regular benefits in the 260 weeks before the beginning of the claimant’s benefit period and that benefit period was established during the period that begins on the later of January 4, 2009 and the Sunday before the day that is nine months before the day on which this section is deemed to have come into force and ends on June 5, 2010, the number of weeks of benefits in Schedule 10 to that Act that apply in respect of that claimant is deemed to be the number of weeks that would otherwise apply in respect of the claimant but for this section increased by
(a) 5 weeks, if the claimant contributed at least 30% of the maximum annual employee’s premium in 7 of the 10 years before the beginning of the claimant’s benefit period;
(b) 8 weeks, if the claimant contributed at least 30% of the maximum annual employee’s premium in 8 of the 11 years before the beginning of the claimant’s benefit period;…..”

You get the idea.

I’m no lawyer, but it seemed that the wording was offering something less than what was suggested in the announcements. So I took a closer look. Here’s what the Bill being considered by Parliament says:

• Nobody who was laid off before January 2009 will be helped by these measures. This despite the fact that the financial crisis hit in October 2008, and many people in the forestry and manufacturing industries were laid off before that.

• Most people won’t get anywhere near 20 weeks of extra help.  They could get as little as 2 weeks extra help tacked on at the back end of the duration of benefits – the amount of time that was proposed, a year ago, to be eliminated from the front-end so that people didn’t have to go for as long without any income as their claim was processed.

• To qualify for the full extension of benefits, you have to have been employed and paying 30% of the maximum annual contribution for 12 of the last 15 years. (So much for the definition of being “long-tenured” meaning employed for 10 years.)

• You don’t qualify for any extension of benefits if you have claimed more than 35 weeks of benefits in the last 5 years.   A lot of people fall into that category.  Andrew Jackson of the Canadian Labour Congress estimates only about 10% of those who exhaust their benefits will get help.   This serious change to the terms of eligibility for benefits means that we are back in the era of “repeat offenders” thinking when it comes to EI.

• Even if you’ve been steadily employed for a long time and not needed EI for the past 5 or more years, if you have worked part-time or casual hours (the plight  of many people who are just waiting for that opening in the full-time job department) you may not qualify for the maximum duration of help, because you haven’t paid enough into the kitty.

• People in businesses that have regular lay-offs for purposes of retooling, maintenance, or inventory rebalancing are deemed responsible for their reliance on EI, and not worthy of additional help. (Ah so. Being found guilty of the crime of unemployment comes with a hefty financial penalty. But if you almost collapse the financial sector you get a government bailout.)

• If you get laid off in the wrong time frame – after June 6, 2010 – even if you meet the most stringent definition of “long-tenured”, you get less help. Extra benefits drop by five weeks shorter as of June 6, 2010, and disappears altogether if you happen to run out of benefits this time next year.

• Every day the committees spend discussing the merits of the legislation, or ways to improve it, gets docked from the period of time the unemployed get help. The end date of improvements, September 11, 2010, is immovable. This detail is just another way that the minority Conservative government is telling Opposition members “our way or the highway”. The sobering thing is that the highway may bring us a Conservative majority government. If this is how they operate in a minority, watch out for what liberties they will take in a majority situation.

Bill C-50 pits different categories of the unemployed against one another. It even pits people in the same boat against other people in the same boat if they don’t comply with the timing of the end of the recession as viewed by the Conservative government – September 11, 2010.This despite wide-spread expectations that, even if GDP shows every sign of recovery, unemployment will continue to rise throughout 2010.

This legislation guarantees that Parliamentarians will be back at the table, haggling over whether these marginal improvements should be kept in place or if the recession is actually over. The debate will be again over people’s “dependencies” rather than how bad the economy is, and what lousy options the average unemployed or underemployed working person has.

Bill C-50 ends with the “coming into force” section, which is a masterpiece of deliberate confusion. Some sections of the legislation are retroactive to September 12, 2009, some are effective the day of royal assent, and some things come into force “the second Sunday before the day on which this Act receives royal assent”. The Conservatives benefited from similar language for quick passage of the budget bill. The same type of wording was used in the section dealing with EI reforms. It came as some surprise to members on the committee, discussing the adequacy of the measures to deal with the economic crisis, that every day they talked about it was a day less that the unemployed were getting help.

The Conservatives are again playing Parliament like a fiddle, and members of the Opposition risk getting Conned once again. I don’t envy them. Millions of economically insecure Canadians rely on these men and women who have the thankless task of deciding whether this is enough, whether it can be further improved, whether we could or should live with a minority government that is so indifferent to so many Canadians.  This is a minority government that looks dimly on input for crafting public policy in these troubled times, rejecting not only the views of the opposition parties, but even those of their own back-benchers.

Memo from the Prime Minister’s Office to the unemployed and the rest of Parliament: it sucks to be you.

Enjoy and share:

Comments

Comment from Stephen Gordon
Time: September 18, 2009, 2:27 pm

It was *always* clear from the very beginning that if any changes had to be made to EI, it should be on the treatment of long-term employed.

I agree that the CPC measure falls short of what would be ideal, but it didn’t help matters that the opposition parties (especially the Liberals) wasted so much time, energy and political capital on the eligibility criteria. If they had spent that time pointing to the inevitable problems facing the soon-to-be long-term unemployed, it would be even clearer just how weak the CPC proposals are.

But instead, the opposition position just sounds like standard “Insta-ReactionTM” (‘Just add outrage!’), rather than a thoughtful position. And it’s being dismissed accordingly.

Comment from janfromthebruce
Time: September 18, 2009, 3:22 pm

Armine, does this legislation go to mainly help long-tenture workers who lost their jobs in the oil/gas industry in Alberta?
So essentially Harper is taking care of his own, so to speak, and maintains his base of support? Or in other words, he and his fellow elected members in Alberta won’t face a backlash and revolt in his heartland?
Thank you for explaining.

Comment from Paul Tulloch
Time: September 18, 2009, 11:25 pm

I think the CLC response has been the most fitting, at least the headline, the unemployed were offered nothing but crumbs.

This in the face of some of the most dramatic economic downturns.

The question I have is why are the NDP actually supporting it. The above legal double talk, is like a sieve, and not much pain and suffering is actually taken out of the flows into that giant stock of pain and suffering.

I just don;t see how this is even remotely supportable by anybody that calls themselves progressive.

Look I thinkw e are all fairly used to the back stabbing that the working people have taken from the tories during this great recession. But to see that knife in another parties hands that call themselves friends of the working people, well, that is just plain old low and immoral.

I am quite sad with orange.

Comment from duncan cameron
Time: September 19, 2009, 9:47 am

This is a minority parliament. There are ways of opposing the government other than forcing an election. One way is (on second reading, approval in principle) to support a bill to change EI even if it offers only crumbs, and then in committee to bring in Armine, Stephen, Andrew Jackson and other experts to tell the public what is wrong with it, and how it should be amended.
Together the Liberals, NDP, and Bloc have a majority of votes. Since the government does not contribute to the EI fund, you could argue this is not a money bill and should be amended, even if spending does go up.

Comment from Darwin O’Connor
Time: September 19, 2009, 10:00 am

While the opposition can amend the bill, the admendments, or a least the final bill, has to be supported by the government to pass. The speaker ruled on this recently that EI bills are money bills.

Maybe I’ll ask the Federial Finance Minister if he’ll acept admendments to the bill when I see him in a few minutes.

Comment from Lana Payne
Time: September 20, 2009, 6:40 am

I am a UI/EI junkie. Just wanted to get that out of the way. I would like to add that this proposal sets a dangerous precedent as it attacks and diminishes the principles of social insurance. Social insurance as we know is a lot different than experienced-based insurance. C-50 says an individual is entitled to extra benefits based on their experience with the EI system, how much they have collected in the past and how much they have paid in premiums. This is what the Liberals tried to do in the 1990s when they first introduced EI. At that time it was called the Intensity Rule and workers were penalized (with a lower benefit rate) for every 20 weeks of benefits they collected to a low of 50%, while everyone else got 55% of their average earnings.

Basing entitlement on past use of the EI system and how much you have paid into the system, changes the principles from social insurance to experience-rated insurance just the direction the Conservatives want. They are using the economic crisis to damage what has been a long-standing and very important program for Canadian working people.

In addition to being offended by who is left out in this EI proposal, we must also denounce the dangerous precedent that this sets.

We were successful in getting rid of that nasty Intensity Rule, but it took tremendous fightback – 11 MPs (Liberals) in Atlantic Canada lost their jobs as a result of those so-called EI reforms.

Comment from Paul Tulloch
Time: September 21, 2009, 5:58 am

I just do not see how the NDP wins out of this. They confuse the hell out of voters and alienate their base by throwing their lot in with the Tories, for what? And at what cost?

How is a 6-8 week delay going to help the NDP- in terms of preparing for an election- unless they are prepared to prop up the tories longer than that, which will be the end of the party if they do- at least in my opinion. I see them losing votes from their base at a high rate for keeping the likes of Harper in power, for even one day.

If the liberals could not get the Tories to make amendments to the Bill, how are the “Socialists” going to fair? It sure was not a well thought out move.

The tories and liberals are laughing all the way to the voting booth on this one. Gees what a disaster.

pt

Comment from duncan cameron
Time: September 23, 2009, 4:12 pm

Thanks to Darwin for setting me straight, and Lana for a fine post, explaining what is really wrong with the Conservative proposal.
I wrote about the politics of this here:
http://www.rabble.ca/columnists/2009/09/parliamentary-politics
Paul I do not see a win for the NDP out of this. I do see them avoiding the trap set by Harper, who is ready to blow Ignatieff out of the water with attack ads, and would at least be returned with a minority or worse. Layton would look pretty stupid if he pulled the plug on parliament and the Tories won a majority.

Comment from Paul Tulloch
Time: September 23, 2009, 9:52 pm

Duncan,

So why did Iggy end his relations with the tories.

I will admit that the attack ads were effective, and so too were the economic plan ads, (sponsored by all of us- that is so lame).

Why do the conservatives have so much darn cash? I thought when they changed the financing of campaign rules, it would produce a more even playing field, but it seems that is not the case.

Anyway, I will concede you this point Duncan, (and not just because your older and much wiser) only because I am starting to think the polls are indeed turning in favour of Harper. The whole hot potato of who got us into this election issue will way heavy on whoever gets caught holding the potato.

I still do not like this and I do think the NDP should never have been left in this position. Not sure of all the inner decision making and timing, but it sure is not a place they want to be in.

Seems like the recession double dip may starting to be more of a reality here in Canada, and if that is the case, then this could all come back to haunt Harper.

Recall that we are in the middle of a really big recession and I am not so sure that once the attack ads wane a bit and the liberals attack back that the economy and the environment will become the major focus amd blow up in Harper’s face.

This could be accelerated if more of the Made In USA stimulus stays south of the border and the dollar keeps rising from the rising oil prices. I think that Harper stimulus plan was basically relying on a lot of the Obama stimulus coming North- so we again could see this further unfold.

I know this Layton is looking kind of stupid holding these tories up, and why would it be him that takes the blame for pulling the plug. If anybody deserves that blame it is the liberals. They were the ones who walked away from the coalition, and now walked away from the tories.

I don’t think anybody would blame Layton for pulling down the tent pole, I mean who expected him to keep HArper in power anyway. I surely did not and I am sure a whole bunch of progressive never thought he would.

pt

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