Proposed EI reforms miss the mark

Simon's picture

After the all-night 22-hour voting marathon in the House of Commons last week, Bill C-38, the federal government’s omnibus budget implementation bill (a.k.a. the Jobs, Growth and Long-Term Prosperity Act) has swiftly passed 3rd reading in the House and expected to clear the Senate in the next few days. In addition to the highly publicized and controversial changes the bill will make to Old Age Security, the charitable sector, and environmental legislation, provisions in Bill C-38 will also allow for significant new reforms to Employment Insurance (EI). The message behind these reforms is loud and clear: if you’re able and available to work, don’t get too comfortable on the system.

The changes

At the centre of the changes to EI in Bill C-38 are provisions that will allow the government to define some currently vague rules around EI. Right now, EI claimants are supposed to be making “reasonable efforts” to find “suitable employment” but neither “reasonable” nor “suitable” are defined. On May 24th, Human Resources Minister Diane Finley announced the Conservatives’ proposed changes (coming into effect in early 2013), which will establish three categories of claimants based on their EI history:

  • Frequent claimants (workers who have had three or more claims and received over 60 weeks of benefits in the past five years): these claimants will be required to accept immediately any “similar” (yet to be fully defined) job that pays at least 80% of their previous wage. After seven weeks of benefits, they will be required to take any job that pays at least 70% of their previous wage or risk being cut-off from benefits. The majority of seasonal workers will fall into this category, which represents 17% of all claimants.
  • Long-tenured workers (claimants who have paid into the EI system for seven of the past ten years and have received 35 or fewer weeks of EI benefits in the past five years): these claimants will be required to accept any jobs in the same field that pay at least 90% of their previous earnings in their first 18 weeks of benefits; after that, they will be required to accept any “similar” job paying 80% of their previous earnings. This group accounts for 25% of EI claimants.
  • Occasional claimants (everyone else, including first-time claimants such as young and new Canadians): these claimants will be required to accept a job in the same field that pays 90% of their previous earnings in their first six weeks of benefits. After seven weeks, they will need to accept “similar” jobs at 80 per cent of their pervious earnings. After 18 weeks of benefits, they must take any job that pays at least 70% of their previous wage. Fifty-eight per cent of claimants fall into this category.

Claimants in each category will be required to keep detailed evidence that they’re looking for work such as applications and records of searching job boards, attending interviews, workshops, and job fairs.

The government is also taking steps to help people find work that matches their skills by introducing a new job alert system that will send claimants regular emails with details of the latest job postings in their area. And they’re establishing stronger links between the EI system and the temporary foreign worker program to ensure that job vacancies aren’t filled by foreign workers (who are often paid significantly less than Canadians and have precarious status) when there are unemployed Canadians who could fill those jobs.

The implications

As CPJ has raised before, EI reforms are needed. But rather than making the system more understandable and accessible, these reforms will, for the most part, make it even more complicated and inconsistent. The reforms attempt to target and prevent frequent users from depending on EI benefits as a regular source of income, but in doing so severely limit access to everyone, including, disproportionally, the vulnerable workers who – for better or worse – must depend on the system for their well-being.

Yes, EI is supposed to function as a stop-gap, temporary measure. But in forcing claimants to shorten their search and take jobs below their skill level, the reforms don’t do much to help workers adapt to and create a dynamic, skilled labour force. In addition, the new regulations will create downward pressure on wages at the lower end of the labour market as claimants are compelled to take lower-paying jobs or else lose out on benefits. How are these reforms the basis of healthy economy?

Vulnerable workers will bear the brunt of these reforms as increased emphasis is put on individual agency and responsibility. What, though, of the public justice responsibility of employers to offer good-quality, stable jobs at decent wages? Unfortunately, this seems to be an element totally absent from the current conversation.

It’s not all bad news: the new job information system, for example, is clearly a good idea. Yet despite what are perhaps good intentions, the majority of the federal government’s proposed EI reforms miss the mark and even further limits access to a system that has already failed too many.

Simon is CPJ's Socio-Economic Policy Analyst.

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