TORONTO, Jan. 15 /CNW/ -
January 14, 2009
Open Letter to the Prime Minister of Canada and Provincial/Territorial
Premiers on the occasion of their First Ministers Meeting in Ottawa
January 16, 2009
Jobs Crisis Calls for Agreement on New E.I. and Training Supports
We are calling on you as our elected leaders to collectively forge an
agreement that provides new Employment Insurance and training supports as part
of an economic stimulus package that responds to the gathering storm in
Canada's job market.
The crisis has already inflicted considerable pain on families and
communities. A further battering looms, with layoffs in virtually all sectors
of the economy.
There is broad consensus on the need for better EI benefits. The Council
of Chief Executives has joined in the call for improvements urged by unions
and various parliamentary committees, and reflected in Bill C269 and many
Unemployment insurance can be the most powerful of all economic
stabilizers. A federal study has shown that during the recessions of the early
'80s and '90s, UI prevented deeper and longer downturns and reduced the shock
of both job and GDP losses.
But we've entered this new economic crisis with a much weaker EI system.
It provides only half the coverage it did in the last recession. At any given
time only 42% of the unemployed are receiving EI - because fewer workers
qualify and because benefit weeks were reduced.
The US Congress has seen the wisdom of giving priority to adjusting the
UI system as part of their stimulus package. In November they passed a second
federal extension to state unemployment benefits which means that workers in
many states are now collecting up to 59 weeks of benefits. A bill supported by
President-elect Barack Obama would provide a further extension to the end of
2009. If that happens, workers laid off in early 2008 may be collecting UI
benefits for up to two years in many states.
In Canada the EI maximum is 45 weeks but only for regions with 10%
unemployment. Most workers live where the maximum is only 36 to 40 weeks. From
coast to coast, workers in cities like Vancouver, Calgary, Regina, Winnipeg,
Ottawa, Quebec City, Fredericton and Halifax have a maximum of 36 weeks.
We've gotten EI wrong on at least three accounts.
- We've made it more difficult to qualify for benefits. In a region
with 8 to 9% unemployment, qualifying hours are more than 3 times
what they were in the recession of the early 1980s and more than
double what they were in the early '90s.
- We've reduced the duration of benefits. Many displaced workers are
shocked to find that benefits don't run to 50 weeks as they used to.
While a pilot project extends benefits by 5 weeks to a 45 week
maximum, it only applies to 21 of the 58 EI regions.
- We've reduced the benefit level, now only 55% of earnings. At one
time it was 66 2/3%. There's also a 2009 maximum of $447 (below the
$465 maximum set for 1996 then cancelled) which means workers earning
over $900 weekly get less than half their former earnings.
Furthermore, workers are forced to exhaust any severance pay before
It's time to repay some of the more than $54 Billion that successive
governments have borrowed from the EI "surplus" premiums paid by workers and
employers. Indeed, until 1989 the federal government actually contributed to
the EI Account to pay for extended benefits. It has not contributed since
We urgently petition you to support these measures as part of a stimulus
1. (a) Increase benefit duration to at least 50 weeks in all regions;
(b) Provide an additional year of "Special Extension" benefits if
national unemployment exceeds 6.5%, paid from federal general
(c) Further extend EI Part 1 benefits as "Skills Development Income
Support" so long as the worker remains in approved training. New
provincial training initiatives and course completion rates will
inevitably suffer if workers do not have sufficient income. This
will be particularly important where long-term workers need
extended training and literacy programs. Those who don't qualify
for EI should be given similar income support through funding
increases to Labour Market Agreements.
2. Set a fixed 360 hours to qualify for all types of EI benefits - in
Currently the requirement is set monthly and varies from 420 to 700
hours depending on the unemployment rate in each of the 58 EI
regions. There is no reasonable justification for this variation.
Many workers can't meet the tough new requirements especially given
the growth in part-time and temporary jobs Prior to 1996 when an
insurable week was defined as 15 hours or more, workers could qualify
for a short duration claim with fewer than 360 hours.
3. Eliminate the 2 week unpaid "waiting" period.
4. (a) Provide benefits that are at least 60% of earnings, based on
workers' 12 best weeks of earnings, and increase the $447 maximum
(b) Suspend the allocation of severance pay.
5. Actively promote and expedite E.I. Work Sharing including a new Work
Sharing While Learning program. Encourage innovative uses of these
programs to help workers stay on the job.
6. Revamp Older Worker Adjustment Initiatives, including supports for
intensive re-training and bridging to retirement. This will be
particularly important for long term employees in vulnerable
industries and regions.
At some point we should also turn our attention to recent changes in the
EI Act which moved us away from counter-cyclical financing of EI. We should
set EI premium rates so that we are raising rates in upturns and reducing them
during downturns, which a 1995 federal report concluded was key to EI's role
as Canada's "single most powerful automatic stabilizer". We're failing to save
in the fat years for the lean years - which are very much upon us now.
For further information:
For further information: John McClyment, CAW Communications, (416)