From Q-Ray bracelets to 8-minute ab machines, the airwaves are full of late night infomercials making dubious claims that raise the suspicions of consumers. For most Canadians, when these ads come on, it means it's time to turn off the TV and go to bed. There is one product however, that has not yet graced the airwaves, but is a bigger scam than them all: Employment Insurance (EI).
Now you may be asking, "How is EI a scam? I pay into it, and if I lose my job, the government's got my back right?"
The answer to that is no, not exactly.
The government plays favourites with EI benefit payments, basing your eligibility entirely on where you live and what you do for a living.
When it comes to EI, we are truly in a class of our own as the only country in the world that discriminates based on where you live.
To illustrate the grand rip-off currently being pulled off by the federal government on unsuspecting taxpayers, let us use a fictional all-purpose box store called Nick's Stuff as a microcosm for Canada. The workers signify Canadian taxpayers while the different departments represent the different regions of Canada.
In this case let's imagine that EI is not a government run program but a product offered by a private insurance company. Looking to drum up new business, the company sends its best pitchman, none other than celebrity huckster Vince Offer, to sell Nick's Stuff workers on this product.
"It's great," he drawls. "All ya gotta do is pay us $900 a year, your company will toss in $1,300 and we'll look after ya. Nothing to worry about."
Curious, a worker from the Sports Department asks if he'll be guaranteed benefits if he loses his job.
"Of course," replies Vince. "That's why we call it Employment Insurance."
Relieved, every single worker signs up for EI. While most of them are pretty sure they won't need to use it, they are glad it's there in case they do lose their job. And they're happy to help out their colleagues in a time of need. It's the Canadian way after all.
But pretty soon, things start going all wrong.
Michael and Dougie over in the Seasonal department have just wrapped up three months of selling patio furniture and lawn ornaments. It's September now and the Fall products are coming out. But tired of working, they decide to cash in on this new EI program they've heard so much about.
They hand in their EI application to Vince, and he rubber stamps it with a grin.
"Here ya go fellas, you get $16,830 spread over 32 weeks."
Michael tries to contain his excitement. "So you're saying that even though we worked only 12 weeks, and only paid $200 into the program, we get that much money?"
"Shhhh, it's our secret," says Vince, with a conspiratorial wink.
Meanwhile, Debbie loses her job after also working 12 weeks when hours storewide are scaled back. She's from Hardware, Nick's Stuff's biggest department located right in the centre of the store. But it's fallen on hard times recently with a manager who spends too much money. As the newest employee in the department, Debbie's the first to lose her job.
"At least I've got EI to fall back on," she thinks.
But much to her shock, Vince rejects her application. "Sorry toots, but this is a no-go. Hardware's a big department. There's lots of work."
"But there isn't, I just lost my job. Those seasonal guys worked the same amount of time as me and they're getting nearly $17,000," replies Debbie, to no avail.
While this illustration may seem extreme, it's true, and happens every day with our current EI system. Workers in seasonal industries, primarily located in Atlantic Canada, and Quebec, but also in many other rural areas, habitually qualify for EI. Meanwhile, in most of Ontario, workers like Debbie simply won't qualify for EI.
The company hocking the fraudulent insurance product in our example would quickly go out business as all but a small group of workers -- the ones who will abuse the system -- opt out. They would also be in deep trouble with the government's Competition Bureau for using misleading advertising.
But of course, we aren't dealing with a private company that consumers can choose to put out business, but a government monopoly. That's why the Canadian Taxpayers Federation has proposed to allow taxpayers to keep their EI contributions in a personal EI Savings Account.
This $20-billion fraud being perpetrated on taxpayers belongs with the other phony products that we routinely ignore during late night television infomercials. So the next time some politician shows up on your TV, like a late night infomercial pitchman, defending EI, make sure to shut them off too.
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