Federal budget leaves out those ineligible for employment insurance

Workers who qualify for employment insurance may welcome the five-week extension of the benefits period, which was announced by Finance Minister Jim Flaherty on January 27 as part of the proposed federal budget.

But the budget doesn’t provide the majority of Canadian workers who aren’t eligible—about six in 10 workers, according to a report released this month by the Canadian Centre for Policy Alternatives—with any protection.

“There is nobody today who wasn’t covered yesterday who’s now covered,” Seth Klein, director of the CCPA’s B.C. office, told the Straight the day after Flaherty unveiled the budget.

The last time Canada was in a recession, in the early 1990s, 80 to 90 percent of unemployed workers were able to access EI benefits, according to Klein.

“As we enter into this recession, it’s about 40 percent,” he said. “Nothing in yesterday’s budget changes that.”

Klein explained that, over the last 10 to 15 years, a lot of the changes to the EI system have resulted in a lower percentage of workers being able to access benefits. He added that the shift toward casual work and self-employment has caused even fewer people to qualify.

Flaherty’s budget would increase the maximum length of time a person can receive EI benefits to between 19 and 50 weeks (up from a range of 14 to 45), depending on eligibility).

The budget didn’t change the number of insurable hours of work required to collect EI (between 420 and 700 hours for most people). Under the current rules, first-time workers and people reentering the work force after an absence of two years are required to put in a minimum of 910 hours.

A CCPA report entitled “Alternative Federal Budget 2009: Beyond the Crisis”, released on January 23, called for a revamp of the EI system. Among the proposed reforms is a reduction of the qualifying period to 360 hours of work.

“As you enter into a recession, welfare and unemployment insurance are what economists refer to as automatic stabilizers,” Klein said. “These are systems that are supposed to kick in automatically and concentrate money in the pockets of the people hardest hit. We are going into this recession with that core economic stabilizer a shadow of its former self.”

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