Posted: Tuesday, 10 August 2010

CLC President Ken Georgetti has called on Prime Minister Harper (in a letter below) to recognize that a continuing jobs crisis demands maintaining special measures taken in the 2009 Budget which are about to expire.

Provisions to give an extra five weeks of EI benefits for all regular beneficiaries to a 50-week regional maximum, and a further extension of regular benefits for some so-called long-tenure workers will expire effective September 11.

While the labour movement has long been critical of key gaps in Canada’s Employment Insurance program, there can be no doubt that it has helped hundreds of thousands of unemployed workers and many hard-hit communities weather a severe economic crisis.

Now is not the time to scale back the special measures. Many workers have already exhausted benefits. Unemployment is still well above pre-recession levels at 7.9% in June, and over 300,000 workers have been out of work for six months or longer.

The Right Honourable Stephen Harper, P.C., M.P.
Prime Minister of Canada
80 Wellington Street
Ottawa, ON
K1A 0A2

Dear Prime Minister:

On behalf of the 3.2 million members of the Canadian Labour Congress, I write to urge you to continue, for at least one more year, the special Employment Insurance income support and training measures which have been an important part of the Government of Canada’s response to the “Great Recession.”

As you are aware, several important special measures have or are about to come to an end. These include an extra five weeks of EI benefits for all regular beneficiaries to a 50-week regional maximum, and a further extension of regular benefits for some so-called long-tenure workers, both of which expire effective September 11. Access to special EI training benefits ended in May, and three important pilot projects will expire later this year.

Prime Minister, while we in the labour movement have long been critical of key gaps in Canada’s Employment Insurance program, there can be no doubt that it helped hundreds of thousands of unemployed workers and many hard-hit communities weather a severe economic crisis. The number of regular EI beneficiaries peaked at 829,000 in mid-2009, and remained at 667,000 in April 2010. Taking into account that many workers move on and off EI even in a recession, likely well over 1.5 million Canadians will have used the program at some time in each of 2010 and 2011. Some $17 billion in regular EI benefits will be paid out in each of 2009-2010 and 2010-2011, even though the average benefit paid is well under $400 per week. Modest income support from EI helped working families deal with a severe loss of income following involuntary layoffs, supported active job searches, and helped high unemployment communities survive. Special measures in support of work-sharing under EI, covering almost 200,000 workers, helped prevent many layoffs, and some unemployed workers have benefited from special measures to provide income support for retraining.

Even at the peak of the recession, just over one-half of all unemployed workers qualified for regular EI benefits. Those most likely to qualify were male workers who had lost reasonably steady jobs. Most women and younger workers fell through the cracks. Still, the fact that the EI system is easier to access when unemployment is high, combined with the special extension of benefits and other measures, has made a significant difference.

Now is not the time to scale back the special measures. Many workers will soon or have already exhausted benefits. Between April 2009 and April 2010, the number of regular EI beneficiaries fell by 55,000 even though the total number of unemployed workers actually increased. Many unemployed workers have been cut off benefits in communities which have yet to see a significant increase in jobs.

While the Canadian economy has begun to recover from the Great Recession in terms of the level of GDP and overall job growth, unemployment and under-employment still remain well above pre-recession levels. The national unemployment rate in June 2010 was 7.9%, well up from 6.0% two years earlier in June 2008, and the employment rate of adult men was down fully 2.5 percentage points from two years earlier. In June 2010, the total number of permanent employees was still down over 300,000 from before the recession. Statistics Canada’s broadest measure of unemployment, which counts labour force dropouts and involuntary part-time workers, stood at 10.6% in June 2010.

Much of the recent recovery in jobs has been in low paid, part-time and temporary employment. This shows up in the fact that average hourly wages adjusted for inflation were lower in June 2010 than a year earlier. As of June 2010, over 300,000 workers – mainly adult men – had been out of work for six months or longer.

Canada continues to suffer from a serious jobs crisis which needs to be seriously addressed. As recently emphasized by the OECD, there is a very real danger that the long-term unemployed will lose touch with the job market and current skill needs, and become permanently unemployed. This would be deeply regrettable in both human and economic terms given that very few new workers will be entering the workforce in the years ahead as the large baby boom generation retires.

In conclusion, I urge the government to continue the special measures put in place, including benefit extensions, flexibility for work-sharing arrangements, and use of regular EI benefits to support retraining of unemployed workers.

Yours sincerely,

Kenneth V. Georgetti
President, Canadian Labour Congress

c.c.: Hon. Jim Flaherty, Minister of Finance
Hon. Diane Finley, Minister of Human Resources and Skills Development
CLC Executive Council
CLC Officers and Assistants