More on Mowat and Winners and Losers from EI
Further to my post yesterday on the Mowat report on EI, I looked up the most recent rates of unemployment for the 58 EI regions. In the current regionally differentiated system, which Mowat wants to replace with a single national system, these unemployment rates are those which determine the level of hours needed to qualify for benefits, as well as the duration of benefits.
The major cities in Atlantic Canada – the EI regions of St. John’s (7.0%), Halifax (5.9%) and Fredericton/Moncton/Saint John (6.7%)Â – which now contain close to half of the regional labour force – all have unemployment rates below the national average. Meanwhile, in Ontario, EI regional rates of unemployment vary greatly between 5.4% and 12.2%. Three regions – Niagara, Windsor, and Northern Ontario – have unemployment rates of more than 10%.
While most of the high unemployment regions are indeed in Atlantic Canada and Quebec,Â the unemployment rate is also very high across the North, including the Territories and the northern regions of BC (11.5%), Alberta (9.0%) , Saskatchewan (16.9%) and, especially, Manitoba (28.5%.) Unemployment is well above the national average everywhere in BC outside Vancouver and Victoria.
I have also confirmed my suspicion that it is the Toronto CMAÂ which is the big loser from the current EI system rather than the province of Ontario. The latest EI and labour force survey data show that Toronto (the Census Metropolitan Area) contains 19.4% of all unemployed workers in Canada but just 12.8% of all regular EI recipients. Ontario minus the Toronto CMAÂ contains 23.7% of all unemployed workers, and a nearly proportionate 20.0% of all regular EI recipients.
One implication is that we should be very careful about looking at the impacts of EI in terms ofÂ provincial winners and losers. If one wants to look at the program in those terms, the transfer going on is from generally low unemployment big cities (though Toronto now has an above average unemployment rate of 8.3%)Â to higher unemployment smaller cities and rural areas.
There is a strong case for a uniform national entrance requirement to EI, provided it is not achieved by raising the threshold in the higher unemployment regions. However, given the very large variation of unemployment rates within Canada as a whole and within individual provinces, we should be very careful about ditching regional differentiation.Â And, as I have argued before, figuring out precisely what is going on in Toronto should be an urgent research priority.