Federal Mismanagement of Employment Insurance is Costing Us

Thunder Bay Superior North MP Deputy Leader of the Green Party Bruce Hyer
Deputy Leader of the Green Party Bruce Hyer

Thunder Bay Superior North MP Deputy Leader of the Green Party Bruce Hyer
Thunder Bay Superior North MP Deputy Leader of the Green Party Bruce Hyer
OTTAWA – Since the economic crisis in 2008 and the collapse of the forest industry, many Northwestern Ontarians have struggled to support their families and make ends meet. Our region has dealt with significant unemployment. Canada’s Employment Insurance system is supposed to help with situations like this, but has been a mess under the previous Martin government, and now even worse under the Harper regime.

In the early 2000s, the Liberals limited access to employment insurance, and established an EI surplus to pad the government’s pockets. Even the Supreme Court of Canada decided (after the fact) that the Liberals had illegally turned the EI funds into a tax grab. Since 2010, the Conservatives have followed in the footsteps of the Liberals before them. They made it even more difficult for EI claimants to access benefits, all while hiking costs to workers and employers. The EI rate went from 1.73 per cent in 2008, to a high of 1.88 per cent in 2013 and 2014 – an increase of 28 per cent between 2010 and 2013 alone.

In 2013, then-Finance Minister Jim Flaherty announced a “freeze” in EI premium rates. This was nothing more than showmanship. After three successive years of rate hikes, EI premiums are still elevated well above what the program actually costs… and the Conservative government is pocketing the difference.

When Finance Minister Joe Oliver first announced a 15 per cent reduction in EI premiums for small businesses in September, I was mildly hopeful. As a small business owner myself, I am keenly aware of how important small businesses are to economic growth. Under the Conservatives, big businesses seem to get most of the subsidies, while small and medium-sized businesses are responsible for the majority of jobs and economic activity in Canada!

This reduction does nothing to offset the damage done by the Harper government to Employment Insurance. The Parliamentary Budget Officer revealed last week that the Conservatives’ shady approach to EI will cost Canadian workers 9,200 jobs. Their expensive small business credit will only generate 800 jobs over the next two years. The government had claimed the credit would create 25 times as many jobs!

Harper has needlessly hiked EI premiums for business owners and employees to add to their own revenue – a tax of $4.4 billion between now and 2018. This is a job-killer if there ever was one. They have frozen EI rates, and continue to charge workers more than is needed to pay for the program. This has cost Canada many thousands of jobs. Now, the Conservatives are trying to backtrack, but their new plan will cost the taxpayer $687,500 for each new job. Talk about incompetence!

Though he tries to convince Canadians otherwise, Stephen Harper has simply continued in the Liberal tradition of Jean Chretien and Paul Martin, and converted a system that is supposed to help unemployed workers into his own personal slush fund.

This money could have been used to extend EI benefits to those that need them…instead of the Conservatives slashing benefits. The surplus could have aided an additional 130,000 workers over the next two years. Or, they could have used it to boost the economy. Keeping unemployed workers from slipping into poverty makes good economic sense: each dollar dispensed through EI benefits sparks $1.60 in economic growth.

But for all his claims of “jobs, economic growth, and long term prosperity,” we know that Harper really only has one priority: re-election. With this latest scheme, his aim becomes clear. He would rather make feel-good policy announcements and pad the government’s pockets than invest in Canadian workers and the economy. Prime Minister Harper is financing his re-election bid on the backs of unemployed Canadians.

Bruce Hyer
Deputy Leader, Green Party of Canada
Thunder Bay Superior North