On June 20, the Mowat Centre for Policy Innovation hosted a panel discussion on recent and proposed changes to the Employment Insurance (EI) program. Panelists Arthur Sweetman (McMaster University), Catherine Swift (Canadian Federation of Independent Business), and Armine Yalnizyan (Canadian Centre for Policy Alternatives) discussed the next steps for EI reform. The panel discussion was moderated by the Mowat Centre’s Matthew Mendelsohn.
The Mowat Centre recently released a policy brief that outlines the changes and analyzes their projected impact. Read our notes on the brief.
Summary of the panel
As with proposed immigration changes, not much detail is yet available on how changes will be implemented and enforced. The panelists generally agreed that the changes will make the system more complicated. In addition, most public attention thus far has been paid to seasonal workers, but the impacts will be much wider than that.
Important changes proposed in C-38
- New regulations will more explicitly define “suitable employment.”
- Creates/distinguishes three types of claimants: a) Long-tenured worker; b) Occasional claimant; c) Frequent claimant.
- More explicit information link to the Temporary Foreign Worker (TFW) program – this link will provide employers seeking TFWs with information about the presence of EI recipients in their region.
- Changes to how benefits are calculated, mostly through the elimination of the “Best 14” pilot project (under this pilot EI weekly benefit rates were calculated using the highest or best 14 weeks of insurable earnings).
- New rules regarding working while on EI: 50% claw-back on all earnings.
- More frequent job alerts to claimants.
- Change to appeals process – new tribunal will deal with the EI, Canada Pension Plan (CPP), and Old Age Security (OAS) programs.
The popular discussion of these changes has been framed in three main ways:
- Impact on Atlantic and rural Canada – Mendelsohn thinks this is overstated. According to Mowat, the changes will, in fact, have a large impact on claimants in Ontario and the GTA.
- Changes are designed to address labour shortages – Yalnizyan argued that currently we have a job shortage, not a labour shortage.
- Downward pressure on wages generally, and especially for low-skill work.
Core arguments from the panelists
- Mendelsohn and Sweetman argued that these changes will have a big impact on the GTA and on Ontario.
- Yalnizyan argued that these changes give the message that the problem is rooted in the unemployed person, who needs to “try harder.” She also argued that these changes are wrong-headed given the impending global recession.
- Swift argued that we should pay more attention to the premium/employer side, as all of the changes are aimed at the claimant, not the employer.
Additional insights from the panelists
- Search and suitable work changes:
- Most affected individuals: Frequent claimants in low unemployment regions (e.g. Alberta)
- Least affected individuals: Frequent claimants in high unemployment regions (e.g. NL)
- Changes will have the most aggregate impact on “in between” areas (e.g. Ontario)
- The “long-tenured” group is defined too broadly; changes will be not be fair for this group.
- More generous provisions for working while on EI could lead to EI becoming more like an income maintenance program.
- Appeal and dispute resolution process will probably work better for claimants with high literacy skills.
- Current system serves full-time seasonal workers, but doesn’t serve other groups well.
- Special benefits (such as maternity leave and compassionate care) should not be part of EI, should be funded in another way, such as through GST.
- Another global recession is approaching – it is unwise to decrease population’s purchasing power at this time.
- Right now, we have a job shortage, not a labour shortage.
- Four out of five jobs created during this recovery are temporary – this is affecting young workers most.
- Only 40.5% of workers are covered by EI (compared to 84% in 1989).
- These changes will embolden bully employers.
- Complexity of these new rules will be a problem – argues for simplicity of rules and consistency of application.
- We should decrease EI premiums in tough times.
- EI Reform – Aiming East, But Affecting Ontario (Arthur Sweetman, on Mowat Centre)
- Employment Insurance & Income Support research section on Mowat Centre site
- Making It Work: The Final Recommendations of the Mowat Centre EI Task Force