What's Wrong With This Country – Part 1

Although we are in the throws of the worst economic meltdown in close to a century, the federal government, has failed to provide any assistance for those workers who have lost, or are about to lose, their jobs. Since the mid-nineties, the federal government, mainly under the Liberals, has racked up one “surprise” budgetary surplus after another. The former Liberal government, in effect, converted the EI program into a hidden payroll tax, and used the excess funds to pay down the deficit. Although the Supreme Court agreed that this was the case, in its recent ruling, it stated that the federal government would not be required to return the money to the taxpayers. This was a fortunate result for the current Conservative government led by Stephen Harper, who since taking office, has given away $190 billion in tax cuts, mainly to the wealthy, and spent another 14 billion dollars in debt reduction. This has essentially left the government without resources to deal with the current economice downturn and subsequent job losses.

There has, as a result, been a very significant cost to Canadians, especially to those who are being forced to depend on the Employment Insurance scheme. In 1996, Canadians were sold on the idea that the program was a waste of taxpayer dollars and discouraged claimants from seeking work. This led to a “reform” of the EI system. The problem is that now, when it is really needed, only 40% of unemployed workers will qualifiy for benefits. The current maximum payout is $435 per week for a maximum of 45 weeks. Unfortunately few of the unemployed qualify for the maximum, and the average payout is only about half of the maximum. Further, in real terms, adjusted for inflation, there has been an almost 30% reduction in benefits since 1996. The situation is worse for working women who make up the bulk of part time workers in this country and seldom qualify for any benefits at all.

Employment Insurance is not now, nor was it ever intended as a welfare scheme. It was meant as a contingency fund for employees who found themselves without a job during the course of their careers. It was paid for by the employees and the companies that they worked for. The money collected ought never have been used as a part of the governments general revenue. Had the system been properly, and honestly managed the program would have had a surplus in the order of $54 billion. A surplus that Canadians facing the loss of their jobs, would have had available to draw on. Instead of dealing with this issue, the current federal government continues to pocket this surplus. The Conservatives have however, suggested the implementation of a new crown corporation that would set up a new financing structure and set the future rates for the Employment Insurance program. This will be cold comfort to those who are being forced onto the unemployment lines.