Jack Layton on Employment Insurance

Some pundits have blasted the NDP for voting with the Conservatives in exchange for “a bone,” “crumbs” or “a peanut” on Employment Insurance (EI).  Others have convincingly countered that forcing an election right now would not advance EI reform or other progressive causes. Nevertheless, the decision to temporarily support the government deserves further analysis in terms of the EI proposal itself.

On the one hand, as I and other union representatives have been quoted as observing, extending benefits for some long-tenured workers falls well short of the full EI package proposed by us and by the NDP itself. On the other hand, this benefit extension is a clear improvement over the status quo. As several commentators have noted, it is difficult to determine how much improvement is enough to justify propping up the Conservatives.

The base of comparison is critical. Relative to the plan put forward by the labour movement and NDP, any reforms negotiated with the Conservatives or Liberals would be inadequate. If progressives hope to make any deals to enhance EI during this recession, we need a different comparator.

Budget 2009 Comparison

Over at Maclean’s, Paul Wells suggests that the bar should be previous EI improvements. He argues that Budget 2009 included $6 billion of EI-related measures, far more than today’s proposed $1 billion. But his first number combines expenditures from the general revenue fund to the EI account for extended benefits, work-sharing and training with revenues temporarily forgone through the premium freeze, but billed to the EI account.

While the premium freeze makes sense, it is not a fiscal contribution to EI and is certainly not the same as enhanced benefits for the jobless. If the latter is our concern, then the relevant figure from Budget 2009 was under $2 billion. (If Wells were to check a more recent press release, he would find that worsening unemployment has since increased this cost to nearly $3 billion and raised his hybrid tally far more.)

Still, how can the NDP vote against $2 billion for EI months ago but in favour of $1 billion for EI today? This question is misconceived because the first round of EI improvements did not come from supporting the government. It was the threat of being replaced by a progressive coalition that made the government’s survival conditional upon putting forward some EI improvements and other stimulus measures.

The NDP’s current support for the government is conditional on it enacting a second round of EI improvements. No progress was made on EI (or other issues) in the interim because of unconditional Liberal support for the government.

360 Hours Comparison

Rather than a backward-looking comparator, I would suggest a forward-looking one. A key benchmark is the Liberal EI plan. If it had been significantly better than the Conservative proposal, then there would have been a case for rolling the dice. In theory, but contrary to all the polls, an election might have produced a Parliament in which the Liberals could have reformed EI with NDP support.

The Liberals have been proposing to temporarily lower the entrance requirement for benefits to 360 paid hours for most workers. But they would keep it at 910 hours for new entrants and re-entrants to the labour force. The Parliamentary Budget Officer confirms that this initiative would cost $1 billion.

About 10% of unemployed workers are disqualified from EI benefits for having worked fewer hours than required in their region of residence. With 1.6 million Canadians unemployed, we might infer that roughly 160,000 do not have enough hours but would otherwise be eligible for benefits.

Because many of these people either have worked less than 360 hours or are new entrants, one must conclude that the Liberal plan would help fewer than 100,000 unemployed workers. (By comparison, the government estimates that its benefit extension would help 190,000 unemployed workers.)

In important ways, the Conservative and Liberal EI proposals are very similar. Both would be temporary and provide $1 billion of additional assistance. Both would arbitrarily exclude some unemployed workers and help only a small fraction of the 1.6-million total.

The main difference is which workers would receive the additional benefits. The Conservative plan targets mostly older workers laid off from steady jobs without having drawn heavily on EI in recent years. The Liberal plan would mostly aid unemployed workers who had previously been scrapping by on contract or part-time work.

It is difficult to decide which group is more deserving of EI benefits. It is even more difficult to contend that the NDP should have voted down assistance for one group in order to possibly have a chance of instead providing the same amount of assistance to the other group. The NDP was right to temporarily support the government based on its EI proposal.

Progressives initially rallied around a lower national entrance requirement because it seemed like an achievable improvement, given concerns across the political spectrum about regional variation in entrance requirements. If even the watered-down Liberal version of the 360-hour standard were enacted, we would hail it as a victory. Now that public debate and Parliamentary pressure on EI have prompted the Conservatives to offer a similarly compromised extension of benefits, why would we call it a defeat?

Of course, EI benefits should have both a lower entrance requirement and a longer duration. Other needed reforms include a shorter waiting period, no clawback of severance or vacation pay, and a higher level of benefits. Passing the government’s benefit extension should not, and will not, end the struggle for all of these improvements.


  • That’s right Erin, and as my mom would have said, “a bird in the hand is worth more than 2 in the bush.”

  • cross posted parts of this Erin at http://www.rabble.ca/babble/canadian-politics/jack-layton-why-i%C2%B4m-voting-stephen-harper.
    thanks as I thought it might help the debate on EI and whether Layton and the NDP should have supported it or not.
    thanks for doing this.

  • Last I checked, there was nothing in anyone’s hand. This is all theory. Nothing has been passed, and what is proposed is only short term. Harper is waiting to pull the plug on Parliament. He prefers this Spring with a honeypot budget and good news and Olympics all around. Even if some temporary EI reform passes, is that worth a cemented Harper lead?

    Then again, the second the NDP catches up on its fundraising (it is behind and can’t afford an election), and if the polls look okay, suddenly, I’m sure, the NDP will develop more backbone.

  • Sure, and by the spring the unemployment line will still be growing along with the welfare line – perhaps Iggy wants to avoid that optic too – as he thinks that eco recovery is just around the corner. Gee that reminds me of last year when all indicators were in that the economy was going into the tanker.
    So, Mark what do you think about what Erin said, “the lib EI plan” is about the same as “the con EI plan” – and temporary too!
    When Iggy talks about eco recovery he talks about taking investors to China, India – that will really help workers in Canada – right? Go to where labour is cheap, invest, and sell your wares in Canada because that is sustainable economic growth right? not

  • Except Francis you keep assuming that an election now would return a liberal minority. You refuse to consider what renewed Con minority would do to the already intransigent attitude of the Cons. The NDP probably are not looking at their poll numbers if they are at realists: they are looking at the liberal and conservative poll numbers. And yes you are right the NDP financing means they are not in a position to entertain a fantasy about a liberal minority.

  • the bottom line is 1 billion is nickel and dimes for the unemployed.

    given the fact that the tories lavishly spread help out to the bankers during this recession unquestioningly and without a lot of accountability to a point now where banks are again on profit steroids.

    We have people who have entered unemployment in numbers that we have not witnessed in decades. Delaying the election by supporting the tories over some nickle and dime scheme is quit poor judgment. Sure longer tenured workers may get a couple extra weeks and if they are really lucky maybe a couple more weeks added on, but is that really worth the damage the NDP will take by supporting Harper. I mean just 4 months ago they were going to replace them with a coalition.

    If this is how the NDP feel they can use their third party status to help working people, then I must say they sure have small goals in mind. Get rid of the tories now and make a deal with the liberals in the next government.

    Here is what we need:

    more money- bring the rates up to 65%

    flatten the eligibility requirements- 360 was a goal but at least take the many requirements now and crunch them down into something that is more reflective of this crisis. Ideally we would like to have a hand full of more progressive thresholds.

    more training based EI- this should be a no brainier- the one the tories unleashed is again filled with all sorts of requirements and criteria. Training is a winning solution on so many levels and in these times money should not be a constraint. Properly planned and implemented a national training plan funded by EI and designed by all the stakeholders should be front and center.

    The above should be permanent- we should also have an emergency relief package that comes in time to help us kick start consumption. Some programs could be designed specifically for communities, groups of workers, like long tenured employees and term workers that Erin mentions above.

    The bottom line is, supportiing Bill-50 is nothing but delaying a much grander reform bill that could be put forth by a non-tory regime. THe 2 weeks gained by a hand ful of workers is just not worth the cost. Yes I would like these workers to have this pay but at what price for the whole. I doubt very much that bill- 50 will effect as many workers as the tories estimate that is just election posturing double talk so the tories could say they had a grand EI reform package ready to go and the liberals voted it down.

    Contary to your beliefs Erin, I do not think it was a good move, in fact I think it was a very poor move by the NDP and the damage they take is going to hit them hard on election day.

    This is not some quick non-Faustian dance with the devil and I wish labour would haul back there horses on this as I am really starting to think it is labour pushing the NDP on this one.

    It is a dance with the devil and much more culturally will be lost here. I just don’t see how this deal balances in favour of working people. It is a net loss of votes – outright!

  • Paul, except how Harper got to give that largeness to the bankers was with the support of Iggy and the libs, who threw the coalition under the bridge, and again, under a different lib leader supported the Harperites budget direction.
    Pray tell, and considering the fact that liberals created this EI mess in the first place, tell me do you really think that libs would offer much more – really?
    Look at reality, you don’t see Iggy out stomping for EI reforms that would meet your “smell test.”
    Iggy is a regressive liberal and to think – don’t be fooled again – would change this is – dreaming.
    Liberals talk a good game, but I always believe past action is a good indicator of future action – so tell me why you think the libs VOTED DOWN anti scab legislation after initially supporting it?
    Make no mistake, there is lots of NDP private members bills coming up that focus on EI – it does not end there, but having an election would sure end those – let’s see how the libs swing their vote:

    Here is the link to House Publications.

    And here is the link to all the other EI reform Bills that the NDP has coming down the pike, are still at different stages of reading, and not removed from the Order Paper.

    As said elsewhere, in stark black and white ends, EI reform does not end or depend only on this one particular Bill. It is not the end all and be all.

    So if the govt falls, all this work starts again, and those unemployed Canadians and soon to be – well welcome to “let’s have an election” every year.

    And while you are going through that House publication, take note that it is the NDP who has by far the largest number of Bills before the House that address both economic and social justice issues – working hard on our behalf.

    Finally if one actually wants to see the list but not inclined to link, is are some of them:

    An Act to amend the Employment Insurance Act (length of benefit period)”Yvon Godin (Acadie–Bathurst)

    An Act to amend the Employment Insurance Act (percentage of insurable earnings payable to claimant)Yvon Godin (Acadie–Bathurst)

    An Act to amend the Employment Insurance Act (amounts not included in earnings)Malcolm Allen (Welland)

    An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits)Carol Hughes (Algoma — Manitoulin — Kapuskasing)

    An Act to amend the Employment Insurance Act (special benefits)Dawn Black (New Westminster-Coquitlam)

    An Act to amend the Employment Insurance Act (increase of maximum number of weeks: combined weeks of benefits)Chris Charlton (Hamilton Mountain)

    An Act to amend the Employment Insurance Act (benefit period increase)Carol Hughes (Algoma — Manitoulin — Kapuskasing)

    An Act to amend the Employment Insurance Act (benefit period increase for regional rate of unemployment)

    Both the NDP and the Bloc have lots more but not listed here. Go check out who is really working on behalf of workers in Canada.

  • What is beginning to disturb me is the argument about E.I. Admittedly, there’s lots to be upset about, starting with the 50 Billion plus that was stolen by Paul Martin the last time the system was overhauled.

    And, the refusal of just about everyone to see E.I. as it actually is– a deffered wage.

    However, it’s overshadowing the real issue, and that’s how this recent economic crisis has accelorated a trend that began with Free Trade, that is, the systemic and purposefull removal of good paying jobs for working men and women in Canada.

    We can talk about E.I., and it has to be talked about, but it can’t be the main focus.

    The pea is under the other shell.

  • Jan,

    I understand that the NCP are the only party that is actually working for working people. And yes I know there are a lot of bills in the works. How many will get passed given the dynamics. If you tell me that many will get through then fine I am all for it.

    Yes I understand Bill-50 is not the end all an be all of EI reform. However, as we tinker away with these small steps on a path to reform, the Tories continue to be in charge of this minority gov’t and continue to do what they do best- not much as their belief and ideology in no role for government continues to pervade the hill.

    The optics are what I am speaking of here and what effect that will have on the voting day. Its all well and good that we think we might be able to get at some of the needed changes to EI, but at what cost.

    Splitting the party again, there are many in the party that just do not feel some EI changes are worth the cost of this Faustian like dance with the Tories.

    Will any of these reforms get through?

    The question is one must weigh the benefits of what can actually be gotten through in terms of reforms and the optics on the public of a quite fickle NDP party. During this time what other policies will these libertarian Tories be making head way on during this extended stay in power.

    I say use the power now and throw them out. Stop them now and minimize the damage to the party.

    It will be hard to take credit for these reforms at election time. The tories will be holding this up as their doing, not the NDP.

    And how long do the NDP have to keep this motley crew in power for all these proposed reforms to maybe see the light of day?

    This is a quagmire that will bring the party into a space where confusion and focus become lost, and so to does the party.

    So again I ask you, will any of these reforms make it through the process of becoming policy, and if a one or two do, is it worth the cost to the party come election day?

    Potentially the party is merely just worth this sacrifice, if that is the case, then go for it. Maybe that is the only way to stop the tories, getting rid of the NDP.

    We are definitely on that path here.

  • Great post Erin. Thanks for trashing the spin.

  • nb. Paul, there are people in the countryside who are glad the NDP showed some flexibility so that some things could get done in parliament, instead of fighting and posturing all the time, and that the NDP’s flexibility shows that they maybe aren’t ‘scary’ socialists who just get their backs up and whine non-stop for a ‘revolution’, but take reasonable steps in parliament.

    myself, i’m with Tommy Paine, “We can talk about E.I., and it has to be talked about, but it can’t be the main focus.”

  • re: “Harper is waiting to pull the plug on Parliament. He prefers this Spring with a honeypot budget and good news and Olympics all around.”
    and regarding talk around ‘optics’;

    If Harper is able to pull off these kind of ‘optics’, it is because there is Insufficient Talk of Core Public Control of Finance.

    Progressive people and the media and politicians need to talk more of the Basic Problem that bankers, not parliamentarians, currently run the show, and we must get democracy over finance. ‘God over Mammon’. A sensible public control so that the casino does not continue run at will to the tune of insiders, ruining jobs, lives, and the environment. whatever language works.

  • The general public are not stupid. They can understand the real fundamentals, but not if progressives join the ‘optics’ carousel.

    Integrity and the basics count far more, a solid foundation.

  • The problem with forcing an election is that the likely result is the same balance of power in the House as we have now. (Of course things could change during an election, maybe for the better, maybe for the worse.)

    If the Liberals ever say that they will try to form a government even if they have fewer seats then the Conservatives, then an election would probably be worth the risk. But, if anything, Ignatieff has suggested he won’t.

    Therefore, if the election will likely result in the same situation we have now, we may as well take advantage of our opportunity to get things our of Harper before another party decides to let him do anything he wants again.

    We should be making sure the EI law has everything is was supposed to have and get the government started on our next demand.

  • you can bet Iggy on one thing- Iggy’s quest to get power. He says now he would not consider a coalition, but again do you actually believe he would turn down that if it were his only way into power.

    He still thinks the liberals can win a majority. He is ready to roll the dice, and worse case scenario, he would form a coalition with the NDP and others if it were the only way to take power from Harper.

    Do we need to have another election to prove to him and the liberals that he cannot win a majority and must settle for a coalition. Well I guess so.

    It is much more than optics for many on the left and I did not mean to suggest that it was simply that.

    It is the feeling of letting Harper continue on his rule during this great recession, and do nothing for working people.

    We need more than some band aid solutions to EI,, we need a plan for the entire economy. Propping up government is delaying a real plan of action.

    So yes I do think the NDP could do far better dealing with Iggy than Steve.

    Why are we being so short sighted here. Toss the tories! Some small tinkering with EI is not going to help working people get through this recession. We have so many other needs, that keeping these tories in place for one day longer is a complete failure to see the bigger picture. sorry Jan but that is the way I see it, and I really do not understand the progressives wanting to prop up Harper.

    We are not through this recession yet- and working people need more than EI fixed!

  • Was it a coincidence that the EI concessions by Conservatives appeared to mirror Libby Davies’ Private Members Bill? First day she was giddy with excitement and then she retreated for a couple of days to avoid media attention. Of course Jack Layton came to the rescue of the StageCrasher with his rhetoric of making the Parliament work.

    One can debate if the extended EI measures were a timely reprieve for a couple of hundred thousand workers at the expense of leaving Conservative govt at the helm but the burning question is how did this meeting of the minds happen so suddenly between Harper and NDP leadership with a common blank historic shared fundamentals other than on one other occasion when they joined forces to defeat Liberal govt in 2006.

    As for the Conservatives defense of $350 million savings by not going to unnecessarily wasteful elections, the Economists can figure out if it is a plausible argument in the face of Incompetence and Mismanagement. This Conservative/NDP created Status Quo will Fail to prevent the Inevitable change in government.

  • “Potentially the party is merely just worth this sacrifice, if that is the case, then go for it. Maybe that is the only way to stop the tories, getting rid of the NDP.”

    “It is the feeling of letting Harper continue on his rule during this great recession, and do nothing for working people.

    We need more than some band aid solutions to EI,, we need a plan for the entire economy. Propping up government is delaying a real plan of action.

    So yes I do think the NDP could do far better dealing with Iggy than Steve. ”

    I see this kind of argument every time I take a look at Buzz’s rabble.ca/babble site. It’s always there in one form or another.

    My thanks to Erin Weir for pointing out that the estimated price tags on extended benefits for long tenured workers and a 360 hours VER are in fact identical. It’s a point you don’t see in the regular commercial media, partly because they’re only interested in political gamesmanship. Actually, it looks like it’s not just the big media pundits who are only interested in political gamesmanship!

    As for the proposition that one is better off dealing with the Liberals, the 1990s Paul Martin budget downloads prove otherwise, as do the actions of the Liberals this past January in repudiating any coaltion.

  • “As for the proposition that one is better off dealing with the Liberals, the 1990s Paul Martin budget downloads prove otherwise, as do the actions of the Liberals this past January in repudiating any coaltion.”

    During the “budget downloads” the Liberals had a majority. If we want to know what the Liberals might do in a minority you should look at the NDP Budget in 2005.

  • Harper’s rising in the polls has been a recent conclusion by the pundits and their measurement vehicles on voter preference snapshots.

    This after the tories have punished us all with one of the slickest marketing campaigns on an economic plan that is basically the antithesis of a plan. Harperites don’t plan an economy.

    There are two points that my progressive friends seem to miss here. By leaving Harper in power we have absolutely nothing happening on the climate change front, unless you count coffee and a donuts. We all have the enclosure of the Canadian economic landscape with free market policies, at the nads of libertarians.

    So again I restate my position, tarding off a mere tweaking of EI gains for keeping these libertarians on the bubble is about as sickening as it comes.

    Don;t worry- we will be given a right good kick in the ass by the international green community quite soon. With Harper’s quite public apathetic attitude towards climate change and the building awareness of the massive environmental damage from the tar- sands, Harper’s whimsical attitude towards climate change is about to take on a whole new dimension in his downfall.

    350.org will be setting its sights and Harper is within the cross hairs.

    On the economic front there are some issues that will also start building towards his downfall

    1)- the run away loony is going to put a whole lot more pressure on our economy especially what is left of our manufacturing sector.

    2) incrementing pressure from the bankers for raising rates- is that just me or is there a seemingly misguided attempt by bankers right now to raise rates? Something to the effect of keeping housing prices in check they want to increase rates- aka we need more unemployment to bring housing prices down????? THis will not go over well at the box office.

    3) the continuing decline in unemployment and the lack of a response to fix this in a sustainable way. For all the talk of employment gains in last months LFS, a lot of that gain was in public sector numbers and we saw further declines in the goods producing sector. More alarming is the export declines we are witnessing, and that with rise in the loony will cause even more export declines- which can only lead to one thing- more job losses on the horizon.

    So ask me again- is it worth keeping Harper in power? A spring election is a must!!! The fall election will never happen now.

    I still believe quite strongly that the liberal decline is just a result of HArper’s massive adverting campaign and is a blip. The fundamentals are against Harper. And I do believe a coalition is in the cards for the liberals and the NDP. THis recent fall sure must be rattling Iggy’s cage and making him rethink the coalition option.

    Sadly as Harrer stays in power, and other less right wing govt’s like the one south of the border pour hundreds of billions of dollars into their economy in developing longer term productivity enhancements- we get left fighting over a few bits of EI regulations. We are going to be left behind- this was the one opportunity that the world economic system said- go ahead and spend some money on updating your infrastructure- and we did not. Surely these added deficits onto the debt will be paid off by a more updated and sustainably based economic infrastructure.

    The optics of Harper going for coffee instead of the climate change talks was I thought a defining moment in Harper’s downfall. Its coming- his lack of insight into the new economy is his weakness and in the end going to cost us dearly as a nation.

    Quite sad to see it all unfolding this way.


  • During the “budget downloads” the Liberals had a majority. If we want to know what the Liberals might do in a minority you should look at the NDP Budget in 2005.

    Yes, they did. And in a way, this argument sounds rather like the flip side of “imagine what Harper would be like with a majority”.

    But in any case, the point about the Liberals is moot, since no Liberal administration of any kind is in the offing any time soon. Brian Topp’s recent article in the Globe citing the long run decline in the Liberal popular vote is instructive in this regard.

  • “And in a way, this argument sounds rather like the flip side of “imagine what Harper would be like with a majority”. ”

    Yes it does. What’s wrong with that? Don’t you think that would be significantly worse then what we are seeing now?

    “But in any case, the point about the Liberals is moot, since no Liberal administration of any kind is in the offing any time soon.”

    Are you expecting an NDP administration shortly?

  • “Are you expecting an NDP administration shortly?”

    There’s a cheerful thought! Glad you mentioned it, Darwin. The answer would be sooner than you think.

    Seriously, the long term decline in Liberal voting strength had been noted by the academic political scientists who conduct the Canadian Election Studies. Here’a link to Topp’s opinion piece in the Globe:


    The key section in the article is this quote:

    The Liberal party has been in long-term decline since 1980 and this process has not been halted, so far, by yet another new leader.

    The fundamental change is Quebec. Every Liberal leader between Laurier and Trudeau could start the quest for a majority on the basis of a lock on Quebec. Not anymore.

    Now Liberal strategy must be built on growing out from their sole remaining fortress in the Greater Toronto Area. As events in recent days have demonstrated, that’s not always as helpful a place to start.

    Topp was challenged by a reader to back up the assertion and he provided this comment:

    Here are the Liberal election results since 1980:

    1980 44.4%
    1984 28.0%
    1988 31.9%
    1993 41.2%
    1997 38.5%
    2000 40.9%
    2004 36.7%
    2006 30.1%
    2008 26.2%

    The Liberals are an important party in Canadian politics and will likely remain so, no doubt about that. But the general trajectory of these numbers is clear — a steady decline with occasional bumps up. A key part of the problem is Quebec, I argue. Mr. Chretien won back-to-back victories in 93, 97 and 00 by winning almost every seat in Ontario, three times in a row. An impressive accomplishment — one that has escaped his successors so far.


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