Thank you for the welcome and for the invitation.
The Inter-Provincial EI Working Group was formed in 2013, initially with coalitions in New Brunswick and P.E.I., Quebec common front groups, and the Good Jobs for All coalition in Toronto.
We developed a joint statement on principles and EI reforms, and now more than 100 organizations from coast to coast have signed that statement. Earlier this year, we also wrote to the Prime Minister and others in government with respect to EI reforms and the need for stimulus spending in that budget.
We believe we need to rebuild our EI social insurance system. The health of EI and that insurance system is vital to the larger economy and not individuals alone. As an earlier federal study found, EI is the “single most powerful automatic stabilizer”, reducing both GDP and job losses by up to 14% during recessions.
Much of that earlier capacity, though, has been lost, with only about four in 10 of the unemployed now receiving EI benefits after years of repeated cutbacks. The most recent StatsCan figures for July show an EI recipiency rate of 42.9%, or 43% roughly, among the unemployed in Canada. That's pretty much where it's been for a long time. In Canada's three largest urban centres, it's much less: Montreal 31.6%, Vancouver 20.5%, Toronto 20.3%. The lowest in each of those last cases has only one in five of the unemployed getting EI.
We know that there are a number of reasons for that: the growth in long-term unemployment; precarious part-time, temporary, and non-full-year jobs; self-employment issues with the issuing of records of employment; and the failure to apply. In any event, the fact remains that there were much higher recipiency rates, 70% to 80%, before the last big overhaul of EI in 1996. We need to get a grip on the modern labour market so that EI can properly respond to it.
We appreciate that the government has made some significant improvements, including the elimination of the 910 rule and the forthcoming one-week waiting period. On some other changes, the jury is still out because the implementation has not yet been specified. In general, we view these as the down payment on the changes that are really needed.
It perhaps goes without saying that we support a new emphasis on full employment policies in the federal arena. That includes a lot more attention to the issue of underemployment. This will also serve as part of an equity agenda given the preponderance of women, racialized workers, aboriginal workers, those with disabilities, new immigrants, and young workers in the precarious job market.
Specifically with respect to EI, we have five key recommendations. I won't go into them at length right now. Number one, we want to see the government fast-track the review of EI in a changing labour market, the one that was promised in last year's election. We need to repair one of the most obvious problems with EI, and that is the issue of access. We think that is going to have to necessarily involve reforms with both the EI variable entrance requirements and the EI hours system.
We recommend a 360-hour standard requirement for a basic entry-level claim. There's no legitimate reason for a different number being required, whether you're in Laval or Saskatoon. We hope, come the end of the year, that the government will start to move in that direction by restoring a single EI economic region in P.E.I. and the three territories. As for the EI hours system, it is currently based on a 35-hour work week. It's been a long time since paid employees had an average 35-hour work week. It is now hovering around 30 hours, even less in the service sector, which is where most people work. In the retail sector, the largest sector of all, it is 27.5 hours. We need to revamp that hours system.
Second, we need to see benefit rates at 55% of normal earnings increased. It not only creates hardships for families, but it undermines the role of social insurance to act as an automatic stabilizer.
Third, we want to see EI better help workers to develop their skills and retrain. That goes, of course, to say that we need money put into labour market development agreements, but it also means that we need to get ahead of emerging industry and labour market transformations that are happening due to climate change, tech change, and Canada's further commitment to a low-carbon economy. Sometimes this is called just transitions. We—