Thanks for the invitation to appear. It's nice to see you again.
I'm going to read a short statement and then get into some of the analysis.
I can see already from Barbara's presentation that there's some overlap between us. I'm going to try to cut some of mine down.
Unemployment insurance has broken the social insurance contract that Canada's social policy pioneers cherished as a crucial element of a modern social security system. Virtually all employees pay EI premiums, but only some can draw upon the program's income benefits and related employment services, if they become unemployed. The flawed social insurance contract effectively discriminates against low-wage workers, most of them working in non-standard jobs. Women fare much worse than men.
Unemployment insurance should act as an automatic economic stabilizer in a modern economy such as Canada's. It must fulfill a dual role during an economic downturn such as we're presently in. It should provide income support by replacing lost wages for the growing ranks of the unemployed, and by injecting money into the economy it should help sustain businesses that rely upon consumer spending. Unfortunately, the measures in the 2009 budget will actually worsen the imbalance in the current employment insurance system, by improving matters somewhat for the minority who manage to qualify for benefits while continuing to do nothing for the majority of unemployed women and men who will remain excluded from the program.
We cannot simply turn back the clock and restore the old unemployment insurance system. We have to look at more radical reforms that go beyond EI to include welfare and supports for the working poor. In short, we need a new architecture of benefits for working-age adults.
The story of EI might be familiar to you by now. It's a program that started in 1940. At that time, it covered about 40-some percent of the workforce. It was a fairly small program. Over the years it expanded until 1971, when Bryce Mackasey was the minister who brought in the modern unemployment insurance program, which covered virtually the entire workforce, with the exception of the self-employed.
What happened in the 1980s and 1990s was that there was growing criticism of the unemployment insurance program. That led in the 1990s to a series of restrictions and cuts in EI. I can't go into them now, but the last one, of course, was the 1996 change from “unemployment insurance” to “employment insurance”, a truly Orwellian shift in words. We're now seeing the result of the constrictions that occurred back in the 1990s.
If you look at the coverage of the unemployed and the percentage of unemployed receiving regular EI benefits—I'm focusing on the regular unemployment benefits—we've seen a phenomenal decline in the benefits over the years. In 2008, we're down to 43%, so 43% of all unemployed Canadians qualify for regular EI benefits.
If we look at women versus men, of course a smaller percentage of women qualify for benefits, and the gap between the sexes has been increasing over the last six or seven years: there's a wider gap for coverage between men and women. In 2008, only 39.1% of unemployed women received benefits, as opposed to 44.5% of jobless men.
We've looked at a measure that constructs a ratio of the coverage of men to women, whereby “1” would be equality and anything lower.... We can see that over time the gap between men and women has been increasing. More men than women receive unemployment insurance as well, although when we track them over time, looking at the effect of the business cycle, the shapes are about the same for men and women.
What we see, if we compare EI recipients with the number of unemployed, is a widening gap between those who get benefits and those who don't, and women are worst off.
We looked at coverage of employment insurance by major cities in Canada, and the picture is quite shocking. About 30% of unemployed are eligible for benefits in Canada's major cities. Just to give an example, in Calgary 20.8% of men qualify and 17.1% of women. If we look at Toronto, it's 24.8% of men and 23.7% of women. So in the large cities, where eight in ten Canadians live, the majority of the unemployed get no support from employment insurance. And again, the situation is worse for women than for men.
When we look at the differences by province, the variations are absolutely staggering. In Alberta, 23.4% of unemployed receive benefits; we are looking at virtually 100% in Newfoundland. In Ontario and the provinces west, an increasingly lower percentage of unemployed receive benefits.
Why is this? Barbara alluded to it: the variable entrance requirement. This is the feature of employment insurance that turns it into a three-dimensional chess game. Not only do the work requirements vary by 58 regional unemployment areas across Canada, but so does the duration of benefits.
You can have an example—just to give you the extreme example—where you have two unemployed Canadians with the same earnings. The one living in a region with a high unemployment rate will receive more benefits than the same person with the same earnings in a low unemployment region. In fact, you could have a situation where one person gets absolutely nothing from unemployment insurance and the other person qualifies for benefits.
The other problem with this unequal access to the income benefits, of course, is that the related training and employment services are also connected with EI, so that the problem of access is not just the income benefits; it is also some of the employment benefits that are related to it.
Why do we see this gap between men and women? The main reason has to do with the different labour market experience of women, and this is, I think, quite well known now: the growth of non-standard employment—self-employment, part-time employment, multiple job holders. These are people who rarely qualify for employment insurance, because they don't meet the rules, because their work experience tends to be fragmented and unstable.
We see a gender difference there as well. About 34% of Canadians overall work in non-standard jobs, but for women it is 40%, versus 29% for men. Women are much more vulnerable to unemployment and they tend to move in and out of the workforce, including time spent raising children and caring for other family members.
These gender differences also translate when we look at benefits, and Barbara mentioned that. The maximum benefit for EI is $447 in 2009; in 1995 it was $595, in inflation-adjusted terms: $447 now, $595 back ten years ago. So there is a real decline in the maximum benefits payable.
When we look at average benefits, in 2007 the average weekly benefit for women who got EI was $298; for men $360. For women, that would leave them $4,544 below the poverty line; for men $1,754 below the poverty line. So we're not looking at generous benefits by any means.
Concerning duration of benefits, women are more likely, if they receive EI, to get benefits for a short or medium term; men are more apt to get benefits over the long term.
In the percentage of EI beneficiaries who exhaust their benefits we also see a gender difference: 30.4% of women exhaust their EI, versus only 26% of men.
Moving on from EI, I want to talk a little about welfare and EI. Then, I promise, I'll stop.
What's been happening in Canada is that employment insurance, which is supposed to be the social program of first resort, is actually being overshadowed by welfare in a number of provinces. We have a lot more people who are getting support from welfare, people who are unemployed, than people who are getting EI. Of course, welfare is supposed to be the program of last resort, not first resort.
Expenditures in welfare and EI have almost come together, even though welfare is supposed to be a small program for those who don't qualify for EI or are unable to get work.
The question is, what do we do? How do we reform?