MacLeans On EI Reform

ei_reformPerhaps it’s a sign of the tough economic times. As the ranks of the jobless continue to swell in Canada, politicians have taken to bickering over just what to do with them. Over the past month, the Liberals have made no secret they see employment insurance (EI) reform as a viable trigger for bringing down the government. “I just know in my guts as I go across the country,” Ignatieff told reporters at the party’s convention in early May, “that we have an EI system that is not purpose-built for the most serious economic crisis since 1945. And we have to fix it and we have to fix it now. We’re in a crisis situation.”

Fixing it, according to Ignatieff, means lowering the eligibility requirements to 360 hours, or nine 40-hour weeks, for everyone. In most circumstances under the current system, laid-off (or otherwise unemployed through no fault of their own) workers need to have worked between 420 and 700 hours in the previous year, depending on where in the country they live. (Under certain conditions, up to 910 hours may be needed to qualify.) That’s because EI requirements are based on a byzantine system of 58 “economic regions,” each differentiated by their unemployment rates. Regions with high unemployment, like the Gaspé and Northern Manitoba, have the lowest barriers to EI, while places like Ottawa and Saskatoon, where unemployment hovers in the low single-digits, require substantially more hours worked. (In other words, the system works unlike any other insurance plan: the more likely you are to make a claim, the easier it is to make it.)

The Liberals acknowledge that lowering EI eligibility requirements means throwing more money at the unemployed. They peg the total cost of the change at around $1.5 billion. But for supporters of the move, the extra money would work to stimulate the economy in much the same way all that infrastructure spending was supposed to—only quicker. “EI is a very direct and immediate form of stimulus,” says Jim Stanford, an economist with the Canadian Auto Workers. “The money goes right into the pockets of the people who need it the most and the economic evidence is clear that they spend it right away.”

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  • http://None Anna Keightley

    “See today’s Brodbeck article in Winnipeg Sun “EI scheme is fraud”  Sorry, can’t raise the link

  • http://unambig.wordpress.com Raphael

    Thanks for the h/t Jack. Great article, really good.