There are two fundamental issues at play in the debate about reforming Canada’s employment insurance system.
The first is about the regional fairness of the formula for qualifying for assistance.
The second is about improving the future job prospects of the unemployed.
Both need quick and decisive attention.
The moment of need is very much upon us. In Alberta, for example, another 9,300 jobs disappeared in July. Since last October, Alberta has lost 75,600 jobs and our unemployment rate now sits at a 14-year high: 7.2 per cent (in October, the jobless rate was 3.7 per cent).
Most economists say that there will be a significant lag between economic improvement and an employment upswing, so the jobless situation will not improve quickly, and may get worse before it gets better.
So the pressure is on the federal government, and the provinces and municipalities that must fill the gap with welfare and other programs while the unemployed wait for federal help.
Last week, Canada’s premiers gathered in Regina to ask some pointed questions (without having unanimity about the answers) about the existing employment insurance system.
At the same time, a bipartisan group of MPs is attempting to find common ground for reform. The group was launched by Stephen Harper after Liberal Leader Michael Ignatieff pushed the prime minister in the spring about the need for reform. The threat of a non-confidence vote was made then (and is being made again).
Do the Conservatives want to go to the polls over jobless benefits? Not likely.
Nevertheless, the usual political bickering, posturing and general slippery behaviour is being deployed to bog the bipartisan process down.
The employment insurance system’s philosophical foundation is simple (if flawed): unemployed Canadians are less economically vulnerable in some regions than others, say Red Deer vs. St. John’s, N.L. If you live in a robust economic region, you must work longer to qualify for assistance.
There are 58 regions in the country, and they are established on economic standards. In each region, the threshold to qualify for assistance is different. It is defined by local unemployment rates and the critical factor is the number of hours worked. In depressed areas, you can qualify to receive benefits after 420 hours (about 56 days of work). In regions of economic strength (read: Alberta), you don’t qualify for employment insurance until you have worked 700 hours (93 days of work, based on 7.5 hours a day).
Western premiers, in particular, want to move to three benefit regions: urban, rural and remote.
Ignatieff wants a new, short-term, standard: a single national eligibility mark of 360 hours, which he says will immediately provide benefits to 150,000 more unemployed Canadians at a cost of $1 billion. Ontario Premier Dalton McGuinty has proposed a single standard of 420 hours worked, at least until the economy begins to generate jobs again.
Some reform is necessary, and it must happen quickly.
But it must be made in lockstep with a plan for additional training benefits, particularly for the young. The numbers are shocking and growing: 200,000 young Canadians (15 to 24 years old) lost their jobs in the last year; and the youth unemployment rate this year is at 20.9 per cent, the worst in more than 20 years.
Tough economic times force Canadians to reconsider their career choices, and their versatility, and many young people seize the opportunity to get additional training. Red Deer College’s first-year student applications are up 22 per cent over last year. It is a trend being repeated at post-secondary institutions across the country.
But it is a trend that can easily be derailed by rising tuition costs and limited assistance for students.
Employment insurance reform must include not just regional fairness, but also a longer, broader view to funding that includes education costs.
John Stewart is the Advocate’s managing editor.