Quebec's Employment Insurance Nightmare

To contact us Click HERE
Somewhere along the line, UI or Unemployment Insurance became the more politically correct Employment Insurance, but just the same, Quebecers haven't given up the term "chômeur" to describe being out of work or 'Assurance chômage' to describe the  government insurance plan that pays benefits related to loss of employment.

The Harper government enacted a massive reform of the system that came into effect early this month, which will have an important impact on Quebec and the Maritimes.
It targets those who repeatedly go on and off benefits, forcing them to seek alternative employment under strict new rules.
It not only seeks to get rid of freeloaders who only work long enough to become eligible for payments, and then return to the workforce to repeat the cycle over and over again, it attacks another big sector of the benefits pie, that of 'seasonal' workers, who legitimately work only part of the year, in industries like fishing or tourism that can't offer steady year-round employment.
For seasonal workers, EI benefits are less an insurance program than an income maintenance plan.

Elizabeth May, leader of the Green Party was just such a worker for many years.

Ms. May said that from 1975 to 1980, she received what was then called unemployment insurance during the off-season while working as a waitress and cook at her family’s restaurant and gift shop business in Cape Breton, she says.
Labelling regular users of EI, such as herself, as lazy or abusing the system is unfair, she said.
“I paid into employment insurance. When I needed it, I used it. When I didn’t, I didn’t. I raise my personal experience because I don’t think anyone should be ashamed that seasonal businesses in this country that are big, or small, have benefited from a legal system of insurance that pays for itself....”

“I’m coming out myself and saying this was my life. If you want to say this is a wrong way to live, fine,” she said. “Let’s have that conversation....” Read the whole story

The National Post explains these changes clearly.
Read: What exactly are the changes to the Employment Insurance system?

One thing is painfully clear, the reform will affect seasonal workers in the Quebec fishing industry in the Gaspé and Îles de la Madeleine, where fishermen work about four months and remain on EI the rest of the year.
This has set off a panic in the regions affected with demonstrations protesting the new rules held in several Quebec towns.
One demonstration against these EI changes brought out 4,000 of the 14,000 residents of ÃŽles de la Madeleine, an island in the middle of the Gulf of St. Lawrence that depends on the seasonal fishing and tourist industry to survive. Fully 40% of the workforce collects EI during the 'off' season.
One of the fears is that the changes will lead to an exodus out of the region, something that happened in Newfoundland after the failure of the fishery.

The Quebec minister responsible, Agnes Maltais, in a televised interview was absolutely furious with the Conservatives decision, going so far as calling the changes illegitimate because Ottawa never consulted Quebec.

Why is Quebec so angry?
Because those who will fall off the EI payroll may just fall onto the province's welfare role, a downloading of responsibility that Quebec doesn't want.
How much will all this cost?
Nobody knows, the Marois government hasn't even evaluated the effect of these new changes, another sad remark on its competence.

Before the election that brought Marois to power, Pauline made it an election promise to repatriate the Employment Insurance program from Ottawa to Quebec jurisdiction.

"One of the first battles that a Parti Québécois government will undertake is the return the Employment Insurance program.
On Wednesday, Pauline Marois reiterated its commitment to implement its own Québec program because it believes that the workers are not sufficiently protected.
Marois noted that the reform recently announced by the Conservative government of Stephen Harper on tightening eligibility criteria for EI makes the return even more urgent." Link{Fr}

Not many of us, smart or dumb, will put our hand into a flame. It only takes one bad experience to understand the negative consequences.
Yes, even stupid people can learn from experience, unfortunately Pauline Marois is not one of them.

Let's go back a bit when the Quebec government of Jean Charest followed up on a longtime PQ initiative led by Pauline Marois to repatriate the parental leave program from Ottawa to Quebec jurisdiction.
When Marois was a PQ minister she promised that this eventual transfer would be paid for entirely by the repatriation of the $350 million in annual taxes that Ottawa would forgo in Quebec's favour, for taking the program off it's hands.

In 2009, Quebec's repatriated parental leave program didn't cost the $450 million (adjusted for inflation) that Marois predicted, but rather $1.7 billion, this while taking in only $1.4 billion in premiums.

Today, the cost of the parental leave program run by Quebec has skyrocketed to $1.9 billion dollars.
In the first five years of the program, premiums went up on an average of about 6% a year, but still not high enough to reach an equilibrium between revenues and expenditures.
Despite these massive increases in employer and employee contributions, the program will have accumulated a $713 million dollar deficit by the end of 2013. Link{fr}
Add to this deficit another $349 million that Quebec owes Ottawa for a loan the province made when the program was transferred to its jurisdiction. The money was used to reimburse Ottawa for furture payments owed by Ottawa to claimants that would survive the transfer.
Quebec has never paid back the loan and so has paid about $29 million to Ottawa each year in interest. Link{fr}
That puts the program's deficit to over a billion dollars since the its inception.

You'd think that the debacle would serve as a cautionary tale, but alas, no.

Which brings us to the proposed repatriation of the Employment Insurance program from Ottawa to Quebec, an idea so financially ruinous that any Quebec politician who advocates such folly, should be fitted for a straight jacket and sent to the loony bin.

Quebec with 23.9% of the Canadian population, receives about  40% of the total benefits paid out by the federal program.
In fact Quebec 'chomeurs' and 'chomeuses' receive $800 million more  each year than Quebec workers contribute to the Employment Insurance fund! Link{fr}

If Quebec takes over the program from Ottawa, it would have to double premiums paid by employers and employees just to offer the same benefits.

If as the PQ promises, that its version of EI will be more generous than Ottawa's, it could mean a tripling of premiums!
A transfer of the EI program to Quebec will cost the province close to a billion dollars a year, at a minimum and if the parental leave program is any example it could easily balloon to two billion dollars a year extra.

I'm sure if Pauline makes a formal request to Prime Minister Harper to take over the program, the Conservatives would be fine with it, unlike Pauline and the PQ, federalists can do their sums.

So where does that leave Quebec?
Well, firmly between a rock and a hard place, its only option is to lose with the present cuts or lose more by taking over the program.

Considering that Quebec has a higher percentage of seasonal workers collecting EI benefits than most other provinces, it means that up to half of all those struck from the EI rolls across Canada in relation to the proposed changes, will come from Quebec. That's quite a pill!

Aside from that, the losses will hit certain coastal regions of Quebec especially hard, Gaspé and Îles de la Madeleine where its been a way of life for a couple of generations to combine EI benefits with seasonal work.
As for alternate employment, don't hold your breath finding it in the boonies.
One of the provisions of the new rules is that workers be required to travel up to 60 miles if a job is available, and for those islanders living in ÃŽles de la Madeleine, travelling sixty miles puts them smack dab in the middle of the waters of the Gulf of St. Lawrence!

For the PQ and the Quebec government this EI debacle is a painful lose/lose situation with Quebec taking  the biggest hit of any province, by far!

One can only wonder if it isn't political payback courtesy one Stephen Harper.

Readers, is the Prime Minister that evil and conniving?