If Michael Ignatieff wants to rattle sabres with the Conservatives and threaten to take the country into another election, Employment Insurance (EI) is not the issue on which to make his stand, especially in light of new deficit figures released by the Conservatives.
While Jim Flaherty and his staff can be easily pinholed for their inability to predict deficits (we weren’t supposed to have one at all initially), Tuesday’s announcement of a predicted shortfall in the $50 billion range, the highest on record, can’t simply be hung on the Conservative government.
According to Flaherty, auto-sector bailouts, decreased tax income and increased EI claims are to blame for the adjusted deficit. EI specifically is a drain on the government’s coffers as claims rose 10 per cent in the month of March. As of May, 681,400 Canadians were collecting EI, yet approximately 40 per cent of those who are unemployed do not qualify for the program because they haven’t worked enough hours.
Ignatieff wants to see a nation-wide threshold of 360 hours worked to qualify instead of the system introduced by Jean Chrétien’s Liberals in 1996. That program tied benefits to hours worked and the regional unemployment, reduced the period benefits could be claimed and dropped the benefit rate by five percentage points, all in the name of making EI more difficult to access. So in pressing Stephen Harper for change, Ignatieff is dumping on his own party’s history.
What further exacerbates Ignatieff’s problem is what the Employment Insurance Act created — a monstrous surplus last tallied at $54 billion that Auditor General Sheila Fraser repeatedly criticized for being too large, a point Harper, while in opposition, frequently repeated. Instead of holding that money in a separate fund, former finance minister Paul Martin dumped the surplus into general revenues during his days as finance minister to bring Canada out of deficit. That surplus is now gone.
While it should never have grown to such a staggering figure, that surplus sure would come in handy now as the government is paying out more and more on EI claims as more and more workers receive layoffs instead of promotions. It would mean not having to tinker with a system designed to be self-correcting — claims become more accessible as the unemployment rate grows. Alberta’s own EI claims have soared 131 per cent alone, with the unemployment rate in the north creeping up past 10 per cent. Now a worker in Fort McMurray needs only 525 hours to qualify. In Edmonton, where unemployment is hanging in at 5.5 per cent, workers need 700 hours.
It’s no secret the system needs a fix. After all, what kind of insurance are we providing part-time workers who pay into EI, then get laid off before they reach the necessary threshold for their region? How do you fix a system that is unfair to women because they work part-time so they can raise their children and don’t accrue enough hours to qualify? How can we expect a laid-off person to feed a family on a maximum payout of approximately $450 per week?
But now is not the time to force an election on this issue, especially with the Liberals partly to blame. Before he goes overboard with election talk and calls for Flaherty’s head, Ignatieff needs to remember his party spent the surplus that could have offset a significant portion of this year’s deficit. At the very least, EI premiums need to be collected separate of general revenues to avoid this kind of situation from ever happening again. EI is an important safety net that needs to be responsive to the people who need it when they need it.
Flaherty might not be able to count, but Ignatieff should know his own party’s history.
