Mowat Centre and the EI system

The Mowat Centre has published a new report calling the current EI system unfair because the same worker in Saskatchewan has to work more weeks and will earn less total EI payments compared to someone in Newfoundland and Labrador.  The report says that NL gets $5 for every $1 put in and Ontario gets $0.60 for every $1 put in – more or less a variation on the data I published on this a couple of weeks ago.

Mowat is calling for national eligibility regulations.

But that’s the point people are missing.

I get hammered (they have moved to Twitter now) for saying this but the EI system is not an unemployment insurance scheme where workers that have lost their job earn an income while they are looking for a new one.  The EI system is an income support mechanism for a fairly significant number of Canadians – with a heavier amount in Atl. Canada and non-urban Quebec.  This is due to the make up of the local industries, historically weak local economies, politics and other factors.

So that’s the real conversation.

If you moved to a Mowat recommended solution, tens of thousands of people – more rural and more Atl. Canadian – would lose – on average – several thousand dollars per year in income.  Some a lot more, some less.

What would be the reaction?  How would you react if someone took that income away from you so the system would be more ‘fair’ for the richest provinces in Canada?

In my view, the evidence points to the EI system becoming a barrier to business investment and job creation and that was my point in the earlier column.  This is a far more problematic issue than just income support – which we offer in a variety of ways.

The Old Age Supplement program is more beneficial to some regions than others.  Farm subsidy programs are far more beneficial to Saskatchewan than Newfoundland.

These arguments about ‘justice’ (Mowat calls the system unjust) – could be applied to most government income support/tax incentive programs.  For one party to win, someone will lose.

For me the more salient argument is related to economic development.  We do not want government programs like this becoming a barrier to economic development.

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