You are here

EMPLOYMENT INSURANCE: A VERY SENSITIVE SUBJECT

Our federal government’s recent introduction of proposed reforms to the employment insurance system has prompted the expected furor from both sides of the debate. As Finance Minister Jim Flaherty astutely noted last week, employment insurance is “a very sensitive subject” in this country.

The optimistically-named (like “life insurance”, perhaps focusing on the positive makes it more palatable) employment insurance system will be revised with new definitions of key terms such as “suitable employment” and “reasonable job search” and “frequent claimant”. The practical result of these changes is plainly intended to reduce the financial burden employment insurance benefits place on the public purse.

As Jeffrey Simpson put it in the Globe and Mail, the federal government is “trying to bring about some modest changes to the system, tightening qualifications, especially for those who use EI repeatedly.” Simpson also noted that the reaction to those modest changes will (in some areas) “be loud, furious and perhaps politically damaging.”

We Canadians seem to have a hate-hate relationship with the employment insurance system. In my experience, people who have been fortunate enough not to have ever claimed benefits view it suspiciously and as a drain on their earnings and a subsidization of the lazy and unskilled.

People who do have a need for employment insurance benefits seem, in my experience, to feel that the weekly payments are too minimal and too short-lived. Surely, the federal government’s pending changes will only exacerbate this feeling.

Nonetheless, I have the sense that as a society we are collectively proud of the fact that this aspect of our Canadian social safety net exists. It’s something we can point to – along with universal medical coverage, publicly funded education, etc. – as separating us from many other parts of the world. But, like health care and education, our pride doesn’t prevent us from griping about it.

Functionally, employment insurance strikes me as an effective concept in the sense that it serves as a pinpoint redistributor of wealth. It’s money that, in a sense, is transferred from the hands of the “haves” directly into the hands of the “have nots”.

It seems that the most frequent recipients of employment insurance benefits are employees in seasonal industries such as forestry, fishing, and tourism. In these cyclical industries, employment is very much on-again off-again and, in certain regions, alternative employment to fill those off-again periods may be hard to come by.

In a sense, employment insurance is the price we all pay as Canadians to have those cyclical – but important – industries and to have people who are willing to fill those sporadic jobs. I don’t know if you’ve seen any episodes of “Deadliest Catch” but I’d far rather those guys get employment insurance for a few months every year than for me to have to go catching crabs myself.

The Globe and Mail’s letters to the editor, this past weekend, depicted the starkly differing ways in which Canadians view the employment insurance system. One wrote, “Most Canadians are not aware of how little is provided by the Employment Insurance system to workers. The maximum payment is $485 a week, no matter what you earned while employed. Could you live on less than $2,000 a month?”

The other side of the fence was highlighted by a second writer. “EI recipients who have abused the system have forced the government to set higher bars all around. Repeat users are still refusing jobs and this is unacceptable.” If there’s anything we Canadians don’t like, it’s our neighbours undeservedly getting something for free.

So, what can be said about this initiative? First, I have to give the federal government some credit for being willing to tread in such sensitive territory. Really, it would be far easier and politically expedient for a government to just leave the system alone.

Second, will these changes actually result in fewer people receiving employment insurance benefits and, thus, savings for the public purse? I’d be willing to wager a dollar or two that, five years from now, we’ll look back and see that actual benefits payouts have not decreased appreciably at all.

Third, I’ve often wondered about the relationship (if any) between the weekly employment insurance benefits maximum and legislated minimum wage levels. If the writer mentioned above had it right that the weekly maximum is $485 at present, and the minimum wage in most parts of the country is in the vicinity of $10 or $11 per hour, then I wonder whether there is a built-in disincentive for unemployed people to take some forms of less desirable work. Would you take a job for around $450 per week if you thought you could get $485 in employment insurance benefits?

The debate over the federal government’s initiative to change the employment insurance system will continue until pushed off the agenda by the next big thing. Once the furor has subsided, I suspect the system still won’t have many fans.

Robert Smithson is a labour and employment lawyer, and operates Smithson Employment Law in Kelowna. For more information about his practice, or to subscribe to You Work Here, visit www.smithsonlaw.ca. This subject matter is provided for general informational purposes only and is not intended as legal advice.