OTTAWA – Human Resources Minister Diane Finley is sticking to her guns on controversial changes to employment insurance, although she concedes not all workers will be better off.
The minister told the House of Commons on Monday her pilot project will help Canadians remain attached to the labour force while collecting EI benefits, and will encourage them to work longer hours.
The pilot, introduced Aug. 5, replaces the previous system that clawed back EI claimants who found part-time jobs once their pay exceeded 40 per cent of their benefits, or $75 a week, whichever was greater.
The new program reduced the clawback on new earnings to 50 per cent, but kicks in with the first dollar earned, not at 40 per cent.
The effect is that low-wage earners will wind up penalized by the new system; however, those who work longer hours and at higher pay will wind up being able to keep more of their earnings.
NDP members tabled a motion Monday asking the government to take steps to fix the program, with one MP saying four in 10 affected by the program would wind up with less take-home pay under the new system.
“This country is short of workers. We have employers who are begging for skilled labour … and the old system discouraged people from working more than one day a week,” Finley responded.
“There are cases, yes, where somebody was better (off) on day one, but they were totally discouraged from working days two, three and four.”
British Columbia MP Kennedy Steward noted the average EI recipient receives about $360 in weekly benefits, meaning he or she would have little incentive to find work unless it paid at least $300 a week. If the part-time job paid only half that, the worker would be about $70 worse off under the new rules as opposed to the old.
“The minister should admit she made a mistake here and redesign the program so it works properly,” he said.
Finley has been under attack on the changes almost from the first day Parliament resumed in mid-September, with Liberal MP Rodger Cuzner of Nova Scotia leading the charge, peppering the government with examples of individuals adversely impacted.
One such person is Rhonda Smith, a manager at a veterinary hospital in Halifax who went on maternity leave and returned to work for one day a week prior to the August changes. Under the old program, she kept all of the $143 she earned in addition to her EI benefits; under the new, $71 was clawed back.
She said in an interview that once she pays for daycare, she nets about $10 for her one day of work.
“It’s very frustrating to suddenly change my benefits that I worked for and paid taxes for half-way through my maternity leave,” she said. “It was a slap in the face, basically.”
She said the government should be encouraging mothers to re-integrate back into the workforce, rather than discouraging them.
“Whether it was intended or unintended, there are people being hurt,” Cuzner told Finley. “What we are trying to do today is to try and help some of the most hard-pressed in this country.”
During debate in the House, Finley said the program encourages unemployed Canadians “to work more while on claim.” She said the old system discouraged workers from seeking to earn more beyond a certain point.