OTTAWA - The Harper Conservatives came under fire Thursday moments after introducing new rules that would force the jobless seeking employment insurance to take lower paying jobs — for some, in unrelated occupations.
The changes to the employment insurance program will impact all jobless Canadians who apply for benefits, but will hit hardest so-called repeat claimants such as seasonal workers.
Human Resources Minister Diane Finley said the intent of the changes is to get Canadians off EI and on to jobs for which they are qualified.
But the opposition parties and labour advocates said the government had gone too far, accusing the Conservatives of blaming the victims of a poor economy and of seeking to bring down wages to please their business constituency.
"What we heard today is the minister scapegoating unemployed Canadians," said NDP critic Peggy Nash.
She pointed out that currently only 40 per cent of Canada's 1.4 million officially unemployed receive benefits.
The changes, expected to go into effect early next year, would create new regulations spelling out what types of work the unemployed must be willing to accept and the effort they must make to find a job.
If they don't meet the new requirements, they face getting cut off benefits or not qualifying in the first place.
The new regulations create three categories of unemployed with a sliding scale of expectations for jobs they must accept — depending on how often they have collected benefits in the past, and the length they are currently on EI.
— Long-tenured workers, mostly employed over the past seven-to-10 years, can refuse a job outside their usual occupation that doesn't pay at least 90 per cent of their previous hourly wage.
But only for so long. After 18 weeks on benefits, they must lower their sights and accept any offer in a "similar occupation" within their industry that pays at least 80 per cent of their previous scale.
— Frequent EI claimants, who have been on the system at least three times for a total of 60 weeks over the past five years, will be expected to take a similar job that pays at least 80 per cent of their previous wage rate from the beginning. After six weeks, claimants will have to take any job for which they are qualified, even if it is not in the same field, at 70 per cent of the previous pay.
— "Occasional claimants" must accept work paying at least 90 per cent of their previous scale in the first six weeks, 80 per cent in the next 12 weeks and 70 per cent after 18 weeks on benefits.
This in-between category — representing about 58 per cent of claimants — is made up of those who do not fit within the work history of the previous two and can include young and new workers with up to six years of steady employment who have never collected EI.
In most circumstances, Canadians will need to accept an available job that is within an hour's commute of their home — longer in some places, such as big cities, where average commutes are longer.
"We want to help Canadians who want to work get back to work," Finley said at a news conference.
"These changes are not about forcing people to accept work outside their own area nor about taking jobs for which they are not suited."
Business groups generally applauded the measures, but labour spokesmen labelled them draconian and likely to drive wages down, and force some unemployed onto provincial welfare rolls.
Earle McCurdy of the Fish, Food and Allied Workers union said the government appears set on even further marginalizing seasonal workers, such as fishermen on the Atlantic coast.
"Clearly seasonal workers are a target. It's clearly designed to make third class citizens out of seasonal workers," he said.
Newfoundland Premier Kathy Dunderdale, a Conservative, has asked for a meeting with Prime Minister Stephen Harper to discuss the issue, but said at first blush the new rules appear to make little sense for some workers in remote areas.
"In a province where we don't have public transportation, if you were working a minimum wage job and you have to travel 40 miles away ... to work at another $10-an-hour job, is that sensible? Is that prudent?" she asked.
She pointed out that Ottawa has no qualms about subsidizing farmers. EI had been the support for the fishing industry, she said.
Senior officials speaking to reporters on background said the rules make no distinction for seasonal workers, even if they go back to the same job each year.
Critics also complained that the regulations need not be approved by Parliament, giving the government leeway to amend or change them any time it sees fit.
"It could all change again in six months," said Nash. "She has the power to do that. She's saying: 'Just trust us' and I don't think Canadians trust this government."
Liberal critic Rodger Cuzner foresaw another problem — that appeals of decisions against workers will now be handled by "a handful of political appointees based in Ottawa" and no longer by experts familiar with the local circumstances.
"EI is a crucial part of our social safety net," he said. "Changes of this magnitude should be enshrined in legislation, not made hastily on the back of a napkin."
Both Cuzner and Nash called on the provisions to be stripped from the budget omnibus bill so they can be reviewed by the appropriate House committee and Senate.
The rule changes also affect how government officials will judge whether someone who is unemployed has made a reasonable effort to find work.
To receive benefits, Canadians will need to prove they are genuinely looking for work — in big cities, daily — including applying for positions, attending interviews and keeping a record of their search activities.
The government said it will aid in the search by emailing them two "job alerts" a day, informing them of openings.
As well, the EI system will be linked to the temporary foreign workers program to ensure Canadians are aware of employers' needs.
"Bringing in temporary foreign workers is not acceptable, especially when we have Canadians willing to work," Finley explained.
Policing the new rules is another matter. Finley said the government will spend an additional $21 million, but that the majority of that funding will go to the job alert system and not toward hiring civil servants to enforce the rules.
Government officials say it is difficult to assess how much the new regulations will save the system, but expect that fewer than one per cent of the half million claimants will be cut off.
The Harper government first signalled in its March 2012 budget that it would "clarify" who can continue to receive benefits, taking aim at people with a long history of claiming EI.
According to Statistics Canada, 549,000 people were getting regular EI benefits in March, a figure little changed from the previous month. In fact, the agency says, the number of beneficiaries has been relatively stable since last September.
There were more people receiving benefits in March in Nova Scotia, Saskatchewan, Ontario and New Brunswick, but the number fell in Alberta.
To receive benefits, individuals must first submit a claim and the number of claims provides an indication of the number of people who could become beneficiaries.
Nationally, the number of initial and renewal claims totalled 234,200 in March, essentially unchanged for the sixth consecutive month.
Provincially, claims fell 2.9 per cent in Ontario, 2.6 per cent in British Columbia, and 1.7 per cent in Alberta, while they rose 2.6 per cent in Quebec and 1.1 per cent in New Brunswick.
Statistics Canada reported this week there were about 237,000 unfilled jobs in February. That's about one available job for every 5.8 unemployed workers. The April unemployment rate was 7.3 per cent.
The Ottawa Citizen
The Ottawa Citizen
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5 Signs Canada's Workers Are In For A Rough 2012
Photo: CP/Andrew Vaughan
Good Jobs Few And Far Between
When it comes to evaluating Canadian job growth, the employment numbers are just part of what worries Benjamin Tal, deputy chief economist at CIBC World Markets. "It's not only the quantity, but also the quality of employment that's falling in Canada," says Tal. "A lot of the jobs that are being created are low-quality, especially part-time jobs and low-paying jobs." Though -- unlike the U.S. -- Canada has regained all the jobs lost in the recession, he says that an absence of good-paying jobs is the "main reason" why wages have stagnated. Adjusted for inflation, personal after-tax income is now rising at the slowest rate since 1995. Meanwhile, the skills mismatch in many jurisdictions has left employers short on skilled labour despite still-high unemployment levels in other regions. "If you lose a job, you don't have the skill set to go an find a job elsewhere that companies want and need," says Tal. (Alamy photo)
When Caterpillar decided to stop assembling locomotives in its Electro-Motive facility in London, Ont., it was a poignant reminder of how globalization is giving deep-pocketed, transnational corporations the ultimate trump card in bargaining with workers: a cheaper alternative. According to Mike Moffatt, a labour expert at the University of Western Ontario's Ivey School of Business, because of automation and an increase in imports from lower wage jurisdictions like China and Mexico, Canadian workers are competing for fewer manufacturing jobs. "That's given firms real power to negotiate down wages," says Moffatt, who points to the <a href="http://www.reuters.com/article/2012/02/06/riotintoalcan-alma-idUSL2E8D699U20120206" target="_hplink">Rio Tinto lockout in Quebec</a> as another illustration of the might afforded to companies with global reach. Since locking out workers at its aluminum smelter in Saguenay-Lac-Saint-Jean on December 31, the Anglo-Australian mining giant has used non-union workers to operate the facility at one-third capacity. With no plans to return to the bargaining table, the company recently announced it is restarting two suspended lines, and is expecting to return to full capacity in May. As Tal maintains, "In this environment, the bargaining power of labour is diminishing."
Just as the power has shifted toward private-sector employers, Michael Lynk, a labour law expert at the University of Western Ontario, says there is a sense that governments are becoming emboldened amid the post-recession climate of austerity that has swept from Toronto's City Hall to Parliament Hill. "There's increasingly an attitude of take-it-or-or leave-it by [private sector] employers, but we may begin to see that with public sector bargaining as well, where they basically say, 'You have to meet our bargaining objectives this round, and we're going to be prepared to endure a short or lengthy lockout to prove our point," he says. Though global economic instability recently prompted federal Finance Minister Jim Flaherty to pull back on his earlier commitment to deep cost-cutting in the upcoming budget, government departments are expecting spending to be slashed by between five and 10 per cent, a goal that will be met at least in part at the expense of public service jobs and benefits. The Canadian Centre for Policy Alternatives recently estimated that the <a href="http://www.behindthenumbers.ca/2012/02/02/federal-cuts-could-push-unemployment-to-8/" target="_hplink">federal government's budget cuts could push unemployment up half a percentage point, to 8 per cent</a>. (CP photo)
From <a href="http://dalgazette.com/featured/faculty-strike-rumours-explained/" target="_hplink">Dalhousie University</a> to <a href="http://www.thestar.com/article/1120516--labour-strife-ahead-in-air-canada-pilot-talks" target="_hplink">Air Canada</a>, employers no longer able -- or willing -- to fund costly pension plans are mounting attempts to roll back retirement benefits, stoking labour unrest and a growing sense of financial insecurity among workers. As Dalhouse University labour economist Lars Osberg explains, the financial crisis took a huge bite out of the value of corporate pension portfolios and the interest rate required to generate the stream of returns to make these programs sustainable. All of which explains why experts anticipate a deepening of the trend away from inflation-protected, gold-plated defined-benefit pension plans, shifting responsibility for retirement savings from employers to workers.
Decline Of Unions
The power in numbers that enabled Big Labour to negotiate better wages and benefits in the aftermath of the Second World War is a distant memory today, as the <a href="http://www.huffingtonpost.ca/2011/12/12/canada-income-inequality-decline-unions-middle-class-jobs_n_1139136.html" target="_hplink">erosion of unions continues to whittle away the strength of collective bargaining</a>. This is particularly true in the private sector, where unionization sits at 16 per cent of employees, less than a quarter of public sector unionization. "I think you will see more disputes with unions having to compromise more than in the past," says Tal. "I really don't see that they have the upper hand at this point." Given the yawning gap between private and public sector unionization, Lynk warns that pressure on public sector unions could mount as it has in the U.S. in recent months. "The argument they've been floating is, 'Why should public sector workers have jobs for life, good pensions, and decent wages? They're eating up your taxes,'" he says. "I wouldn't be surprised if we're not [starting] to see the beginnings of that kind of argument here in Canada."