Parties pledge to give EI a facelift after record year of unemployment

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The Conservatives and NDP are rolling out proposals to give the employment insurance system a facelift, but economists and worker groups who have called for major reforms say some of the proposals fall short, especially given the temporary changes made during the pandemic.

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The National Council of Unemployed Workers and a coalition of more than 250 organizations, unions, municipalities, civil society leaders and parliamentarians have called on federal party leaders to use the temporary measures introduced in the pandemic — the $2,000 monthly Canada Emergency Response Benefit and a much lower insurable hours threshold for EI — as a jumping-off point for major reform.

“It seems unthinkable to us that we could ever consider going back to a failing and ill-functioning EI program,” said Pierre Céré, spokesperson for the NCUW, in an August 22 press release. “We must act and fix the social safety net for real.”

The pandemic exposed the challenges with EI’s stringent limits on eligibility, which were introduced in the 1990s. In normal times, the system requires workers to have between 420 and 700 insurable hours of employment, and where they live determines how much support they qualify for and how long they can access benefits.

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Eighty per cent of the workforce is notionally covered by EI, but just 42 per cent of unemployed Canadians were accessing the benefit pre-pandemic. Gig workers and the self-employed are largely ineligible for support.

“We’ve seen in the pandemic just how essential and vital the employment insurance program is,” said Chris Roberts, director of social and economic policy at the Canadian Labour Congress. “When the chips are down and there’s a crisis, the (EI) program is absolutely fundamental in not only keeping households afloat, but also preventing the economy from spiralling into complete collapse.”

We must act and fix the social safety net for real

Pierre Céré, spokesperson, NCUW

He said permanently lowering the eligibility threshold would be a quick change with a major impact. “One of the things we’ve seen in the pandemic is simply by lowering (eligibility) … it brings in many thousands more employees who were already paying into the program so they can access benefits.”

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The federal government is currently in the midst of EI reform consultations, which will wrap up in October, after the Sept. 20 election. But a June report from the House of Commons’ human resources committee called for substantive changes to EI.

The report called on Employment and Social Development Canada to investigate returning to a tripartite funding model, with government, employers and employees contributing to EI, increasing the amount of money workers could receive from the program, and reducing the number of insurable hours needed to qualify.

The committee also recommended government consult on how to boost EI access among gig workers and self-employed people.

The Liberals haven’t released their platform, but the government earmarked $3.9 billion over three years to address coverage gaps in EI, including a uniform 420-hour requirement for regular and special benefits and allowing workers to get access to their benefits sooner. It also put $5 million toward the ongoing consultations.

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The Conservative platform, released on the campaign’s second day, said it would address the issue of coverage for gig workers by requiring gig economy employers to make contributions equivalent to Canada Pension Plan and EI premiums into a new “portable employee savings account,” which it said will be able to grow tax-free and be used by workers as they need it.

Leah Nord, senior director of workforce strategies and inclusive growth at the Canadian Chamber of Commerce, which represents roughly 200,000 businesses including ride-hailing giant Uber Canada, said she welcomed the “outside-the-box” thinking, but said the Conservative proposal would have to square with provincial labour laws.

Roberts, however, said the party was relying on the existing “misclassification of low-paid gig workers” in its proposal.

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“There’s a very good argument they are employees, and by allowing what we would say are their employers to not make EI or CPP contributions on their employees’ behalf, and instead set up an individual account … is kind of entrenching the misclassified status,” he said.

But Jennifer Robson, an associate professor in Carleton University’s political management department, said it was unclear how the Conservatives would enforce gig economy employers’ participation in the accounts. (Robson gave the federal government technical advice on EI reform during the fall and winter, but was not paid to do so.)

“They’re pointing to a real issue — there are firms in Canada that are skirting provincial as well as federal employment legislation,” she said. “(But) I don’t have a huge amount of confidence, at least from the language that I’ve seen so far from the Conservatives, in their proposed approach.”

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The Conservatives also proposed a “Super EI” program that would temporarily boost benefit levels up to 75 per cent of workers’ salaries — from 55 per cent currently — when their province enters a recession. The party defined a recession as a 0.5 per cent increase in the unemployment rate.

Robson said the proposal only “enhances benefits for people who were already lucky enough to be covered by the system, as opposed to saying in a recession one of the smartest things you can do is make it easier to qualify.”

The NDP, meanwhile, said it would create a low-income supplement modelled on the CERB, which would guarantee at least $2,000 per month to anyone accessing regular or special benefits.

It also proposed extending EI to people who quit their job to return to school, care for children or protect their health, a proposal Roberts called “very welcome.”

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Currently, anyone who quits their job is ineligible for EI except in specific cases such as involving harassment, discrimination or unsafe working conditions.

The party wants to implement an episodic illness pilot project, which would allow affected workers to access sickness benefits for days at a time, on an as-needed basis.

“(That’s) really interesting, because this is a thing where, depending on the nature of your illness, you may be able to work a little bit,” Robson said. “That’s something we should be supporting and encouraging, so that idea of flexibility is good.”

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Robson said she hopes to see parties address the system’s administrative complexity, which makes it slow and cumbersome to make changes to benefits.

The pandemic made it clear the system was unable to respond to a crisis, Nord said, and it needs to be reformed in a way that’s “inclusive and relevant for future generations.” But so far, she said, the approach has been to make small tweaks.

“We have this opportunity to crack this all open,” she said, “but we kind of nibble at the edges.”

Financial Post

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