Current EI reforms should be just the beginning

The system Canada has right now is discriminatory, illogical and counterproductive

It’s not easy. That’s why they call it work.

Todd Korol/Reuters

Assume for a moment you’ve been given the job of creating from scratch a federal program to help out-of-work Canadians find suitable employment as quickly and efficiently as possible. Would you begin with a system that provides greater benefits to workers who find themselves unemployed more often? Or provides incentives to stay in uncertain occupations forever? Would your ideal system offer identical Canadians vastly different benefits based solely on where they lived? And would you lard the program with inconsistent rules, such as offering benefits to self-employed fishermen, but not self-employed farmers?

Of course not. But this is exactly the sort of discriminatory, illogical and counterproductive system Canada has right now.

Last week Human Resources Minister Diane Finley unveiled a series of reforms to Canada’s much-criticized Employment Insurance program. While the changes don’t go nearly far enough to fix the entirety of EI’s problems, at least they mark renewed emphasis on the core task: getting people back to work.

The new rules require a wider and more aggressive job search. Currently, EI claimants receive, at most, three job listings every two weeks. Now a much more comprehensive list of relevant openings (including jobs in other parts of the country) will be delivered to all claimants. The longer a person remains unemployed, the more jobs must be considered.

Frequent users of EI will be required to accept work paying at least 80 per cent of their previous salary in the first six weeks of their job search. After seven weeks, the minimum falls to 70 per cent. Workers who rarely claim EI face somewhat similar requirements. All this reflects a proper adjustment of expectations. EI recipients can no longer refuse appropriate work. Ottawa points to worker shortages across the country, even in areas of high unemployment, as motivation for these changes. The growing use of temporary foreign workers proves many job openings are going unfilled. In New Brunswick for example, in January of this year, 2,444 unemployed fish plant workers applied for EI while 210 fish plant jobs were filled by foreign workers. That same month, Ontario had 648 nannies claim EI and 668 temporary foreign workers approved to do the same job. And in Alberta, 347 food counter attendants and kitchen helpers applied for EI at the same time restaurant owners received permission to fly in 1,261 foreign workers to do those exact jobs. A functional EI system would eliminate such disparities.

EI recipients will also be expected to take jobs that put their skills to use in different occupations. Asked what the rules might mean for a seasonally unemployed lobster fisherman, Finley replied: “If you’re used to lifting heavy loads, then maybe there’s a warehouse that needs some heavy loads lifted.” That seems entirely reasonable. The new rules include a variety of caveats regarding commuting distances and personal circumstances. No one will be required to move to take a new job.

Of course the mere suggestion that a lobster fisherman might be expected to do something other than haul lobster pots from the ocean a few weeks a year has been met with outrage and condemnation. But the driving force behind any proper unemployment scheme must be the recognition that working is preferable to sitting at home. There’s honour in work of any kind. Unfortunately, decades of political manipulation and regional lobbying have perverted EI into something quite different—it’s become a system that rewards seasonal unemployment and encourages a culture of grievance peddling. All this imposes a tremendous price on the Canadian economy as a whole. Premiums higher than they ought to be raise the cost of hiring new staff and push down employment rates everywhere. Workers and industries that rarely suffer unemployment are punished in the process.

It would make more sense to blow up EI and start over, perhaps under the previous and more-coherent title of Unemployment Insurance. A proper system would treat identical Canadians equally regardless of where they lived. It would be experience-rated, so that frequent users would pay higher premiums or receive lower benefits. And it would eliminate incentives for staying at home when there are suitable jobs to be filled—wherever those jobs happen to be located.

As a nation of immigrants, Canada was founded by intrepid folk prepared to pack up and move to a better job and a better life. Why should such a thing be considered beyond the pale today? Finley’s tentative EI reforms merely inform unemployed Canadians of job opportunities elsewhere in the country. A truly serious effort would take a much closer look at encouraging real job mobility. Unemployment is a national problem that requires a national solution.