Central Executive Committee, YCL-LJC

May, 2013

Over the past six months, the Harper Conservative government has put in place vicious “austerity” attacks on the people of Canada by severely restricting access to Employment Insurance (EI) benefits for workers. Young workers, already at a disadvantage in collecting EI, will be further excluded and impoverished.

Cuts to Employment Insurance are not simply a cut in federal funding to a social program. They are cuts to a system into which all working people must directly pay into, no matter who they are, and which is intended to guarantee employment. The working class majority, whose sweat and toil by ‘hand and brain’ has produced all the wealth in this country, are being robbed.

The federal government has built up a huge surplus of $57 billion since the mid-1990s, the result of deep cuts in benefits paid to unemployed workers and rules that prevent most unemployed workers from qualifying for benefits at all:

* Maximum weekly benefits have shrunk from $604 in 1996 to less than $440 today, and an average benefit of just $335 per week;

* Less than four in ten unemployed workers, and even fewer women, qualify for EI

Workers cannot let this happen without a fight!

That’s why over 50,000 workers rallied in Montreal just before May 1st to celebrate International Workers Day and demand an end to the Harper Tory wrecking of Employment Insurance!

The fight against the Harper reforms to EI is linked with the battle to build a united resistance against the reactionary agenda of austerity and the Harper Tories.

Recent experiences like the Quebec student struggle show that it is realistically possible to build a stronger resistance against the corporate offensive, and to win broad support from community allies. Despite the adverse conditions and subjective weaknesses, new forces are coming into the fightback.

As the Communist Party said in its May 1st statement: “Militant tactics and coalition building can move labour from a defensive posture towards a fighting strategy of mobilizing the entire working class and its allies to block the right wing agenda and to move onto the counter offensive. […] A Canada wide common front against the corporate/government attack in turn can win wider support for the goal of a labour led People’s Coalition to unite broad sections of the people’s movements, not around a nostalgic return to a “rosy” Keynesian past, but rather around a platform of radical progressive demands, and for a fundamental challenge to the economic and political hegemony of finance capital, both domestic and international.”

What is on the chopping block?

The first wave of cuts, implemented in January, created three “tiers” to EI, based on paid experience in the workforce (not ‘under the table’ work) as well as time collecting EI. The cuts basically force those who have needed EI before, or remain unemployed for longer than a few months, to accept any work they can find — even if it is 70% lower than their previous pay and an almost an hour drive (one-way) from the worker’s home. The system of appeals of EI decisions was replaced with a specialized court which is much less accessible and will take longer. Lastly, the special measures put in place to help workers in areas where economic activity is seasonal have been unilaterally canceled.

The second wave of cuts, implemented in April, drastically reduces eligibility for EI. Before, anyone in a region of Canada with an unemployment rate above 8 per cent was eligible for EI. Now, the benchmark rate has been lifted to 13.1 per cent. Only a few regions therefore quality: parts of Newfoundland-Labrador, eastern Nova Scotia, Gaspésie, Restigouche, northern Manitoba, northern Saskatchewan, Nunavut, Yukon and the Northwest Territories. And where laid-off workers living in most regions used to be able to use their best 14 weeks of earnings when claiming EI, omitting weeks when hours were inconsistent or the plant was idle, most workers must now use a new formula with a longer time frame, making it harder to filter out lean weeks or temporary layoffs (For example, Windsor now requires 18 weeks, Oshawa 19 weeks, and Toronto 20 weeks).

Nothing in these cuts helps workers find a job.

The Harper government is hoping to weaken social solidarity by pushing nasty and spiteful claims like “there is no bad job” and talking about “repeat users” as if the unemployed were addicts to EI. The reality is that it is almost impossible to support yourself on EI. Benefits are low, run out quickly, and are very difficult to obtain.

Young people should know that current Minister of Finance, Jim Flaherty, who is using this demagogic rhetoric like ” I drove a taxi, I refereed hockey, you do what you have to do to make a living ” also went to private boys high school before graduating from the Ivy League Princeton University and then Osgoode Law school. His first career in politics was as a cabinet minister in the notorious Mike Harris Ontario Conservative government, when he proposed to solve the homelessness crisis — by making it illegal.

It is this kind of vicious corporate ideology that has drafted the EI cuts, which mark a fundamental shift in Employment Insurance further away from a programme to protect workers and further towards a system of “workfare” and forced labour.

It has recently been confirmed that the so-called “fraud prevention” investigators in the Ministry have EI quotas or “saving targets” of $40,000 per month per investigator, which means they must penalize many EI recipients and disqualify many to achieve the goal. The government’s response to the media exposing this news was an investigation into the whistleblowers! Targets for the recovery of benefits are $120 million for Quebec, $110 million for Ontario, $115 million for the Western provinces and Territories and $58 million for the Atlantic provinces.

Investigators are now also making “home visits” with an interrogation-style 23 question survey to verify the eligibility of EI recipients. Apparently this year, 1200 selected unemployed workers will receive a visit (197 in Quebec, in the Maritimes 220, 384 in Ontario and 374 in the west).

Moreover, activist organizations for the unemployed in Quebec are now finding workers dropped from EI after missing only two phone calls from Service Canada.

The claim that workers “should just go where the jobs are” is not only an admission of capitalism’s complete failure in large regions of Canada, like the East Coast, to provide young workers a life with a future. It is also a policy that reduces young workers to “human resources” who can be shuffled around the country at the will of the bosses, and denied the right to make a home where they want.

In addition to restricting access to EI for all domestic workers, Harper and Human Resources and Skills Development Minister Diane Finley have eliminated “special parental benefits” for migrant workers. Previously, this was the only subsection of EI that these workers had access to, despite paying full EI premiums and contributing an estimated $3.4 million annually to the fund. This is a racist and cynical move designed to divide and weaken all workers by pushing a vulnerable portion of the working-class further down.

Other groups particularly hard hit will be women, youth, and workers in industries where employment regularly fluctuates — like those found in rural, remote, northern and Aboriginal communities. But to be clear: this is an attack on all working people and the working class.

The cuts must not be seen in isolation from the Tories other priorities — like tax cuts for the rich, massive increases in military spending and war, environmental destruction, and their other “pay less wages” policies. For example, in a type of legalized racism, employers were allowed to pay temporary highly-skilled foreign workers 15% less than the prevailing local wage. Fortunately this was cancelled due to public outrage. The same can and needs to be done for other attacks.

The EI cuts further throw the brunt of the economic crisis onto the backs of working families — making the people pay for a crisis they did not create.

Currently, about 1.4 million Canadians are officially unemployed — about 25% higher than before the crisis. This number is going up, not down. Statistics Canada has said that there were at least 300,000 more Canadians looking for work in Oct. 2012 than Oct. 2008. Of the jobs that have been created, on average almost half are temporary. In many areas the ratio is much worse. In British Columbia 60% of new job creation is temporary, 75% in Quebec and 84% in Ontario. For women everywhere between the ages 25 and 44, temporary work accounts for 95% of the new jobs.

In this context, it is important to note that the 2012 rate of eligibility for regular benefits from Employment insurance — even before the cuts — is the lowest ever recorded because too few people meet the required qualifying hours in the workforce.

The class-bias of these policies towards the boss and against the worker is crystal clear. The Harper EI cuts are like manna from heaven for the capitalists. By swelling the ranks of the unemployed and underemployed, and increasing the danger of being unemployed, big business weakens the position of workers at the bargaining table. The cuts will help create a climate allowing big business to further tear-up collective agreements, bust unions, and force concessions like lower wages, two-tier contracts, and “Defined Contribution Plan” pensions. As workers exploitation increases, so do corporate profits.

Unemployment is not simply a cyclical feature of capitalism that comes and goes with each crisis. Unemployment has become a permanent structural feature of capitalism with the introduction of revolutionary new science and technologies into production. Capitalism’s liberal apologists have quietly dropped the claim, not uncommon in Canada a generation ago, that we can achieve full employment. Social democracy has generally reversed its position on this demand, with the New Democratic Party of Canada even proposing in the last election that the “private sector” take care of job creation and also campaigning for a change of strategic orientation within the labour movement.

The best solution to unemployment is a job — safe, well-paying, quality and with a union.

The working class in Canada, and young workers in particular, have a long history of militant struggle for employment and to be protected from the perils of unemployment.

It is important for young workers to remember these past battles as we look forward in our struggles today. The Harper Conservatives would like to wind-back the clock 100 years when there was no programme of EI. What did exist was Church-delivered relief for the poor. Inconsistently administered only on the municipal level and therefore massively under-funded, Church relief was totally inadequate and further stigmatized poverty because it was charity.

Today the Harper Tories repeat these lies by talking about workers ungrateful for EI who will not accept honest work. EI is not charity, it is a social right which the working class demands because the toil of working people by hand and brain creates the wealth of this country. This call for social insurance by the labour movement in Canada and internationally at the beginning of the last century received a major push forward with the victory of the Great October Socialist Revolution in 1917. One of the very first decrees of the Bolshevik revolution was social insurance.

Under increased pressure from the Soviet example, capitalist countries began implementing and extending social insurance programmes. The YCL and Communist Party of Canada called for social insurance from the very first days. However, Canada’s flawed Constitution (which was at that time the British North America Act and controlled by the British parliament) grants provinces jurisdiction over a vast range of powers while fails to recognize any national right to self determination for Quebec and other nations. The BNA act thus blocked the development of social insurance programmes.

With the special capitalist crisis of the Great Depression in the 1930s unemployment spiked. The YCL and CPC proposed a comprehensive way out of the Depression and started a campaign for a pan-Canadian Non-Contributory Unemployment Insurance Bill. Instead, the Bennett Conservative government of the time forced tens of thousands of unemployed youth into isolated slave-labour camps. By this time, the labour movement as well as progressives, socialists and communists were pounding on the doors of government and business for Employment Insurance.

In May 1935 the BC labour camps exploded in protest, with thousands of young workers marching out and, riding on the tops of trains, they began an organized protest movement for ‘work and wages’ called the On-To-Ottawa Trek. The Trek was led by members of the YCL, like Arthur ‘Slim’ Evans.

Brutally attacked and suppressed by the RCMP when they reached Saskatchewan, the Trekers protest nevertheless helped force legislation to be passed on EI in 1935 (with other measures like minimum wages) in a ‘death-bed repentance’. A few months later, the Bennett Conservatives were swept out of office in a federal election by the King Liberals. But one of the King Liberal’s first acts was to refer the 1935 EI law to the supreme court, and then British appeals court. They struck down the law because it over-stepped federal authority into provincial powers.

The ruling triggered a Constitutional crisis. It took more struggle and pressure by people’s forces, to make the newly elected King Liberal government enact a Royal Commission of inquiry in 1938, which notably adopted a number of the Communist Party’s recommendations. The Liberals shelved the report. Instead, with the support of right-wing provincial governments of Quebec, Ontario and BC, King introduced substitute makeshift measures enabling the federal government to raise revenues to cover expenditures that were approved of by finance-capitalist interests, without committing it to substantive social reforms.

In 1940, King demanded an act of the British Parliament to amend the BNA act (which became Constitution Act, 1940). This was the foundation of Employment Insurance.

Subsequent campaigning by the labour movement expanded EI coverage from just 42% of the unemployed in 1940 to 95% of the unemployed in 1975, including seasonal workers and some coverage for sickness and maternity. Workers who quit their job were unfairly penalized, but could also receive benefits. The rate was 66% of insurable earnings, ie. your previous wage, and 75% for workers with dependants. The fund was sustained by three-way contribution from employers, the federal government, and workers.

In the late 1970s, however, these terms were changed in a negative way for working people. The Trudeau Liberal government eliminated the higher rate for the unemployed with dependents and reduced the benefit rate. A large EI fund had now built up, and the government began to use it for other purposes than employment insurance like training. The first major raid on EI would occur after the signing of Free Trade, to re-train workers in the post-NAFTA economy.

The attack on the unemployed continued in the 1990s. EI was increasingly “privatized” as big business and the state denied any social responsibility for EI. In 1990 the Mulroney Conservative government withdrew the government’s contribution for the fund and restricted accessibility to over 100,000 workers. In 1993, attacking the freedom of working people to choose their job, benefits were now denied if you quit your work or were fired due to misconduct.

In 1994, the new Chretien Liberal government lowered benefits to 55% of past wages. The Liberal government then raided the EI fund to pay-off the federal debt (which was not incurred from social program expenses) in a massive billion-dollar theft of funds, originally taken from working people. By the year 2000, only around 40% of workers were actually eligible for EI despite paying into it, and the number has obviously dropped since then.

Women workers are disproportionally affected. Current policy, for example, does not allow new parents to use the same work weeks to qualify for both maternity leave and EI. Workers who are laid off while on parental leave therefore are generally excluded.

Over the past decade, workers have seen increasingly restrictive eligibility criteria, shortening of benefit duration, restrictions imposed in calculating benefits, lower levels of benefits, and increased exclusions of categories of workers.

The way forward is through mass struggle and unity of working people, with the youth and social movements.

Major mobilizations around Employment Insurance have taken place in Atlantic Canada and especially Quebec.

This history teaches working people and the youth a series of hard lessons about reform struggle. It teaches us that only through a persistent, united and visible battle in the streets, workplaces, campuses and communities can we make advances in social policy.

It teaches us that the ‘negotiation’ for Employment Insurance has been a struggle over power where what counted was the balance of conscious and militant class forces, and in which the capitalist class made surrenders only for its benefit — for example, refusing the demand of a non-contributory employment insurance bill.

It teaches us a lesson about the necessity for socialism in that no social progress under capitalism is sacred or protected — no matter what the politicians from the parties of big business say — and the capitalist will try to take back any concessions as soon as they can, in this case as quickly as a few years after EI reached its most progressive level of coverage.

The Young Communist League calls for emergency mass mobilization by labour and the youth movement to block these cuts and transform EI to a fully accessible programme which comprehensively protects all workers from unemployment.

We have never wavered in this fight and have consistently been a voice calling to defend the rights of young workers, including a new Charter of Youth Rights which would make a job a right:

1. Spend the entire employment insurance fund on workers and unemployed – providing for EI benefits equivalent to 90% of final salary for the duration of unemployment, no matter where workers live in Canada or their experience in the work force;
2. Make full employment a top priority, and raise the wages of all workers by $100 per week, the real value of wages 25 years ago;
3. Increase the minimum wage to $ 16/hour;
4. Ban “two-tier wages” for new hires;
5. Legislate for a working week of 32 hours without loss of pay and without loss of net service for the public;
6. Ban evictions of renters by landlords because of lay-offs;
7. Ban mandatory overtime, and legislate at least four weeks of paid annual leave;
8. Guarantee the right of marginal benefits for workers in part-time, home and contract work;
9. Make massive investments in the reconstruction of social programs, public infrastructure and social housing – including free post-secondary education;
10. Adopt a policy of fair wage, pay equity and full employment for workers;
11. Take action against poverty, especially among aboriginal peoples, immigrants, women, youth, the elderly and people with disabilities;
12. Abolish “workfare” and introduce a livable guaranteed annual income;
13. Protect and develop the universal public pension system, including a substantial increase in CPP;
14. Enact voluntary early retirement at the age of 60 years;
15. Restore and develop funding to provinces allocated to health, education, housing and social welfare, and improve all standards of Canada, while ensuring that Quebec maintains control and administration of its own programs;
16. Maintain equalization payments to the provinces, and expand transfers dedicated to health, education, childcare and social assistance.