Submitted on Behalf of the Inter-Provincial EI Working Group
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To the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities Submission on the Impact of Recent Changes to Employment Insurance and of Access to the Program ___________________________________________ Submitted on behalf of the Inter-Provincial E.I. Working Group May, 2016 We wish to thank the HUMA Committee for this opportunity to present the views of the Inter-Provincial EI Working Group which speaks on EI-related matters for a large number of community and labour organizations across Canada. 2015 marked the 80th Anniversary of the On-To-Ottawa Trek during the Great Depression. Workers and communities demanded, among other reforms, a social insurance system to provide income maintenance during periods of unemployment. 2015 also marked the 75th Anniversary of Canada’s Unemployment Insurance Act. In the decades since 1940 our EI social insurance system has been key to the health of the larger economy as well as individuals and their families. An earlier federal study found that EI is “the single most powerful automatic stabilizer”, reducing both GDP and job losses by up to 14% during recessions1. But EI has not been performing so well in recent decades in large part because of dramatic changes in the labour market. Only 40% of the country’s unemployed are receiving EI benefits at any given time, some because they don’t qualify, some because their benefits have run out. Until the 1990s more than 70% of the unemployed were receiving benefits. There is a pressing need to rebuild our EI system. The Inter-Provincial EI Working Group is agreed on 5 key recommendations: 1. The government should move faster on EI improvements announced in the 2016 Budget including elimination of the discriminatory 910 hour rule for new entrants/re-entrants and repeal of punitive rules related to job search and suitable employment, including those for hiring halls and union members with recall rights. The elimination of the 910 hour rule is an important down payment on the reforms needed to expand EI access. 2. ALL 2012-13 EI amendments should be repealed. Repeal arbitrary classifications of frequent, occasional and long tenure claimants Rescind new EI regions in Prince Edward Island and Canada’s North Restore the 5 week extended benefits pilot project Restore ‘best weeks’ calculation for low income workers Restore ‘working while on claim’ conditions that benefitted low income workers Restore parental/sick benefits for Temporary Foreign Worker program participants Rescind arbitrary new Ministerial powers to set regulations. 3. The government should immediately address rampant problems with EI service delivery and the appeal system. Staffing levels and in-person services have 1 The UI System as an Automatic Stabilizer in Canada, Peter Dungan and Steve Murphy, May 1995, Human Resources Development Canada 1 seriously declined. The appeal system is also suffering under the Social Security Tribunal that was introduced with the 2012 changes; the model requires fundamental reforms and restoration of an informal worker-friendly process, a tripartite body involving business and labour, and the right to in-person hearings. 4. The government should ensure that there is an independent EI Account and that EI contributions are used exclusively to fund EI programs. 5. The promised EI review should be fast tracked. The government’s EI election platform promised a review of “how successfully the Employment Insurance system is delivering its core mandate to provide income security to workers in a changing labour market” which “will result in changes to the program that ensure more Canadian workers particularly those in more insecure work can get access to the benefits they need.” It follows that a hold should be placed on premium cuts until we know what improvements are needed to restore EI social insurance to health. The review must involve community groups, unions, legal clinics and others who advocate on behalf of unemployed workers and are familiar with the problems they confront. Some EI capacity issues for review: EI access has become an Urban issue. EI policy tends to assume seasonal workers are unique to certain regions but that is an outdated concept. Every major town and big city in this country is rife with non-full year work. Hotels, restaurants, stores, private services, utilities, tech firms and manufacturers all lay off during slow and shoulder seasons. EI beneficiary rates are now at critically low levels in many of these urban centres and as of February fell below 30% in all 4 of our largest labour markets – Toronto, Montreal, Vancouver and Calgary. Community and labour organizations have long advocated replacing the regional variations in qualifying hours with a fixed requirement for a basic EI claim: the lesser of 360 hours or 13 weeks. EI access has become a Service Sector issue. Public and private services now account for 80% of all jobs according to StatsCan’s Survey of Employment, Payrolls and Hours. Employment in this sector is often erratic, part-time or temporary. The survey also reports that hourly paid service workers average 28.1 hours weekly. In retail services, the #1 employer in Canada, the average is just 25.6 hours. Yet the EI Hours System - which dictates qualifying hours and the duration of benefits - is based on a 35 hour week with entitlement increments in 35 hour blocks. The EI Hours System is in dire need of reforms which will especially benefit the women, racialized workers, new immigrants, young adults and working poor in the sector’s more precarious jobs. The new EI Monitoring & Assessment Report states that “results show the highest percentage of earnings interruptions 2 without an ROE (28.7%) are observed in the service sector”, another direct jeopardy to the EI entitlements of workers in the sector. Benefit rates are inadequate. 55% of normal earnings does not provide adequate income maintenance. The average 2014/15 Regular EI benefit was only $434 weekly ($395 for women; $458 for men). For those earning at or about minimum wage, it is considerably less. Reasonable EI duration. It is disheartening to see the debates fixated on when an additional few regions might join the ranks of the 12 regions out of 64 that now qualify for special extensions of up to half a year (5 weeks plus 20 more for long tenure workers). We’re exacerbating existing regional disparities. The Montreal EI region actually had higher unemployment than Calgary in May but both exceeded 8%. It is worth noting that a national average of 6% unemployment used to be the ‘high unemployment’ trigger for government contributions to cover extended unemployment insurance benefits. All regions should have an additional 5 weeks as a permanent provision in the EI Act as was previously the case. ~ The Inter-Provincial EI Working Group represents community and labour organizations concerned with Canada’s Employment Insurance social insurance system. The group was formed in early 2013, initiated by EI coalitions in New Brunswick, PEI, Nova Scotia, Newfoundland & Labrador as well as in Quebec and the Good Jobs for All Coalition in Toronto. By May 2014 more than 100 organizations from coast to coast had signed a Joint Statement of principles and recommendations. In February 2016 the Working Group issued a Joint Letter with respect to EI reforms and the need for stimulus spending in the 2016 Budget. More recently representatives from Alberta and Saskatchewan have participated in the group’s inter-provincial discussions. The Inter-Provincial EI Working Group’s 2013-14 and 2016 Joint Statements are included as part of this brief. On behalf of the Inter-Provincial EI Working Group Laurell Ritchie, EI Working Group, Good Jobs for All Coalition Patrick Rondeau, EI Working Group, FTQ Lori MacKay, PEI Coalition for Fair EI 3 February 10, 2016 Hon. William Morneau, Minister of Finance Hon. MaryAnn Mihychuk, Minister of Employment, Workforce Development, and Labour Right Hon. Justin Trudeau, Prime Minister of Canada Joint Community and Labour Statement on the 2016 Budget, Stimulus, and E.I. We are writing on behalf of the Inter-provincial Employment Insurance Working Group to urge the government to act quickly and decisively to restore the integrity of Canada’s EI social insurance system. In particular, it is vital that the 2016 Budget provide economic stimulus and be at the ready as the country prepares for difficult economic storms. As an earlier federal study found, EI is ‘the single most powerful automatic stabilizer’ reducing both GDP and job losses by up to 14% during recessions. Much of that earlier capacity has been lost with only 40% of the unemployed now receiving EI benefits after years of repeated cutbacks. We recommend the government delay any decision on premium changes and immediately begin the job of making much-needed improvements to EI. All are long overdue but will now also serve as strong economic stimulus in the 2016 Budget: 1. Repeal the 2012/13 EI changes. This includes but is not limited to the punitive and discriminatory job search rules, a detrimental ‘best weeks’ calculation for low income workers, removal of the extended benefit pilot project, erosion of the ‘working while on claim’ benefit for those taking casual work while unemployed, and the politically- motivated addition of new EI regions in Prince Edward Island and Canada’s North. 2. Move up EI improvements. This includes the promised 1-week waiting period and reforms to the EI Hours System that will expand access and restore reasonable benefit durations. The elimination of the 910-hour rule for new immigrants, young workers, and parents re-entering the labour force is an important down payment. But other reforms are urgently needed. EI must be allowed to do the job it’s supposed to do in a labour market overflowing with precarious, temporary and part-time jobs and now facing a downturn.