Who is the bigger enemy of Canada’s employment insurance program—Stephen Harper or Michael Ignatieff?

Armine Yalnizyan, an economist with the Canadian Centre for Policy Alternatives, has said the question is moot.

“It’s outrageous. It’s imponderable,” she told the Straight in a phone interview from Toronto. “I don’t know how the two of them can sleep at night, knowing they can help Canadians, and not doing anything. Gilles Duceppe put it best. He said, ”˜There’s a new coalition in town—a Conservative-Liberal coalition.’”

Today (July 17), Harper and Ignatieff announced they’ll form a “working group” to study potential recession-relevant EI reforms over the summer. The working group will examine ways to allow self-employed Canadians to participate voluntarily in the employment insurance system, and improve eligibility requirements in order to ensure regional fairness. The group must report back with solutions by September 28.

Yalnizyan explained that Canada’s EI system can’t respond to the recession adequately because of four rounds of EI reform in the 1990s: two under Progressive Conservative prime minister Brian Mulroney, and two under Liberal Jean Chrétien.

That’s left Canadians with support similar to the year the unemployment insurance system was introduced, she said, which was 1942.

“There’s so much talk about resources being spent right now, but we have 1.5 million unemployed,” she said. “And close to 60 percent of them have no coverage. What on Earth are we waiting for?”

Yalnizyan, author of the April 2009 CCPA report “Exposed: Revealing Truths About Canada’s Recession”, rattled off the following statistics.

In the first seven months of the recession, she said, B.C. has seen a 47 percent increase in unemployment, 90 percent more British Columbians are drawing on EI, and social assistance rolls are up by 25 percent, or 10,000 people.

This province should brace again, she said, for two more dives. First, when employers who have been holding on to valued employees past their ability to pay them start letting them go. Second, when those workers who were able to get EI are no longer covered.

Many of them will then realize that there are still no jobs, and they won’t qualify for welfare unless they sell off all their major assets, and deplete their savings. After the recession of 1990, Yalnizyan said, it took seven years to get back to the same number of full-time jobs as before the recession.

According to the Caledon Institute of Social Policy, these are some of the effects of the changes to EI in the 1990s:

Ӣ During the 1990 recession, 83 percent of the unemployed qualified for benefits. During the current recession, just 39 percent of women and 46 percent of men do.

”¢ The changes introduced “regionality”, which meant that workers in different areas of Canada needed to work different hours to qualify for, ultimately, different benefits. Half of the job of the working group Harper and Ignatieff have created is to deal with this mess.

”¢ The amount of money a person could receive on EI shrunk in 1996. For example, in 1990, the weekly maximum was $570 (in inflation-adjusted 2009 dollars). Today, it’s $447.

Caledon also points out that a 2005 amendment by the Conservatives changed the way premiums are collected. Ironically, premiums now go up in rough economic times, and down in boom times. So the change results in a recession-time whammy for workers and businesses.

The Conservatives’ five-week extension of benefits to 50 weeks, Caledon notes, “does nothing about the program’s Achilles’ heel—its inadequate coverage of the unemployed. Nor did the budget even begin to restore Employment Insurance benefits toward their early 1990s level.”

Yalnizyan said she doubts this summer’s EI working group will result in any significant or timely changes to the program.

“Ignatieff said 360 hours should be the universal, and Harper said no. And that’s the end of that,” Yalnizyan said. “I have a lot of time for Michael Savage [a Liberal MP appointed to the working group]. He really knows this file well. But he’s just one of six members on the group, so we’re not going to see any changes.

“Canadians are going to have to fend for themselves, just like they’ve been doing for the past 20 years.”