The Budget, Stimulus, and E.I.

We 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.

3. Immediately address rampant problems with EI service delivery and appeals. Staffing levels and in-person services have seriously declined, discouraging workers from pursuing a benefit claim. The appeal system is also suffering with the Social Security Tribunal that was introduced with the 2012 changes; the model requires fundamental reforms and restoration of the business-labour role.

4. Ensure there is an independent EI Account and that EI contributions are used exclusively to fund EI programs. This includes the projected 2016 surplus, which should be used to pay for the highlighted improvements.