by Link Byfield
If there’s one thing that should be vapourized, it’s federal Employment Insurance.
EI (formerly UI) isn’t insurance at all. It’s limousine welfare.
The destruction EI has wrought on eastern provinces has been widely documented for two decades. Yet the federal government, ever trolling for votes, keeps expanding the program.
Two years ago, EI was extended to workers who quit their jobs for six weeks to care for terminally ill family members. How kind.
Trouble is, as Conservative EI critic Lynne Yelich revealed last week, it cost Ottawa almost $70 million on administration to dole out $11 million in “compassionate care” claims. Forgive me for being uncompassionate, but this is simply one more reason — if more reasons were needed — to abolish the whole program.
EI has an interesting if depressing history. It marked Ottawa’s first invasion of the provinces’ “exclusive” jurisdiction over social responsibilities. In fact, it required a special amendment to Canada’s Constitution by the British Parliament in 1940. The provinces went along, because in the 1930s Great Depression, thousands of hungry, desperate men were left to drift across Canada seeking work or handouts from overtaxed municipal welfare offices.
UI started sensibly enough, but in 1971, it was ramped up into a gigantic vote-getter, especially in rural Quebec and the Atlantic. The idea was to save small towns by using EI to subsidize “seasonal” jobs in fishing and forestry which hitherto had not qualified for benefits. This became “Lotto 10-42” — work 10 weeks and loaf for the next 42.
In his excellent recent book, [published by the Atlantic Institute for Market Studies], Retreat from Growth, maritime economist Fred McMahon documents the devastating effect UI inflicts on the Atlantic economy.
During the 1960s, before the feds showed up to “help,” the region had almost caught up to the rest of the country. Unemployment was only slightly higher than the Canadian average, private job-creating investment was the same, and education and skill levels were rising.
Then came Lotto 10-42, along with a raft of bogus short-term government “job creation” grants to help people get their 10 weeks to qualify for benefits. It didn’t matter what the jobs were, and still doesn’t — fixing park benches, counting cars, making fibreglass caskets in Cape Breton. Atlantic political careers are won or lost on the delivery of EI make-work grants.
A maritimer who “hoards” a make-work job longer than the EI qualifying period is considered anti-social and selfish. Think of the neighbours! The wage rates of these bogus jobs are set exactly high enough to deliver the maximum EI benefit. Meanwhile, real jobs frequently go begging for lack of anyone willing or skilled enough to do them, private investment lags, and Atlantic skill levels have dropped, because you can’t collect pogey in school.
Ottawa might as well have handed out heroin. In some towns, 90% of the people are addicted. It got so ridiculous that in 1993, even the federal Liberals decided to scale it back. Resentment flared, and the Liberals dropped from 31 Atlantic seats to 11 in the 1997 election.
Last I read, Liberal Pogey Minister Joe Volpe was scrambling to restore $1 billion worth of seasonal-work EI benefits by cabinet order heading into last year’s election.
The question is, who will end this ridiculous program? Well, not the federal Liberals. Nor the federal Conservatives. Nor the “have-not” provincial premiers. Politically they can’t.
Only the premiers of the “have” provinces, Alberta, Ontario, Saskatchewan and B.C., have a motive to end it, because their workers are paying for it through higher-than-necessary EI premiums. Statistically, it costs each Albertan (man, woman and child) $800 extra per year to keep this federal transfer scam going. The figure for Ontarians is $900.
But first, the “have” premiers need to get over their guilt complex for being better-off. Then they must push for a constitutional amendment restoring EI responsibility to the provinces.
Until they do, nobody will fix the problem, and the whole country will go on paying the price.