Ideally, I would think that no unemployment insurance program, either the EI we have or the second one we're proposing, should take into account unemployment rates. I mean, I don't think it's fair and I don't see the justification for it. However, we live in a world of politics—those of us who work in public policy—and unemployment insurance is one of the most controversial and politically dangerous programs there are to try to reform.
So the reality is that if you say we're going to create a new system that has no regional differences in the unemployment rate, you're going to have losers and winners. I mean, you're going to have people who are going to get lower benefits than they did under the old system. That's always the problem where you have an irrational old system and a rational proposal. In moving to the rational proposal, you're going to have people who get less under the new one than under the previous one.
The reason we put that in, as we said, is this. If, for political reasons, the government insisted that it retain some aspect of regional unemployment—it could be simpler, too, as there needn't be so many regions—then we could build that into this temporary income program. You could build that in, if you wanted. Or you could vary it by province. One of the interesting things about the working income tax benefit—which is one of the great new things that's happened, actually, under the current government—is that the design of that program, even though it's a federal program, can be varied by the provinces. It's a really good feature of flexibility and the kind of federalism we need to work—you know, levels of government.
So with the kind of proposal we're making, you could have a situation where the feds and the provinces work together to vary the rules according one province to another, even though it's a federal program, and that could take into account, if you want, unemployment rates.
I mean, I don't like the idea, but the politics of this are that when you make a change, you always have problems with.... I hate to use the term “losers”, in policy analysis we sort of talk about that. There are people who are not going to get as much as before.