Wednesday, January 28, 2009

Breaking the Back: Harper Budget Gives Little to Poor and Unemployed

Federal budget – On the backs of unemployed workers
By Peter Ewart

For unemployed workers across Canada, there has to be some cruel irony in the fact that the Federal Government’s entire “Economic Action Plan” that was just announced will cost a bit over $50 billion. This $50 billion in the Plan will be used for everything from bailing out banks, to tax cuts, to home renovations. Indeed, it is the federal government’s recipe for dealing with the current economic crisis that is sweeping across the country.

So, what is the irony about this $50 billion? Well, $50 billion is about the same amount that the federal government has looted from the Employment Insurance fund to use for other purposes. This fund was accumulated as a result of worker and employer contributions – there was no government contribution whatsoever. But that did not stop the federal government from scooping the funds.

Indeed, an argument can be made that the entire Economic Action Plan has been financed on the back of the unemployed workers of the country. That being said, what is in the Plan specifically for these workers? Not a heck of a lot.

We have entered an economic period that many claim, including representatives of the Federal Government, is unprecedented in our lifetime for the threats it poses to our jobs and economy. The Federal Government is forecasting that this difficult period could last as long as five years, i.e., it is predicting deficit budgets for that long. Clearly, having EI benefits that last for only 45 weeks, as currently the case, is not anywhere near enough.

So how much will EI benefits be extended for in the Economic Action Plan? Five weeks – for a maximum of 50 weeks. This is outrageous. There are forestry dependent communities across Canada that have been gripped by Depression level layoffs now for several years. And the same holds true for auto industry towns in Ontario and Quebec. What difference will five extra weeks make to a laid off worker in Mackenzie, BC, where all the major mills are shut down, or an auto worker in Windsor, Ontario, where over 20,000 are out of work? Very little.

EI work-sharing agreements have been extended by 14 weeks to 52 weeks. But again, for workers in many communities that are experiencing catastrophic levels of unemployment, 52 weeks is not enough by a long shot.

Funds have been increased for EI related training. For example, $500 million is slotted “to extend EI income benefits for Canadians participating in longer-term training” which, according to the Federal Government, will benefit “up to 10,000 workers.” But didn’t the government check its own unemployment figures? For example, in November of 2008, over 506,000 workers were collecting EI. That number was a 15,300 increase over the previous month alone. Providing funds that will assist 10,000 workers get retrained, doesn’t sound like that much when unemployment is galloping ahead at over 15,000 a month. And, as the Toronto-Dominion Bank has suggested, that figure could amount to over 251,000 newly unemployed by the end of 2009.

It should be noted that another $500 million over two years is targeted towards “individuals who do not qualify for EI training” and for “those who have been out of work for a prolonged period of time.” The total number of these workers is hard to pin down, but in some parts of the country, some analysts suggest that there could be as many as 2 or 3 times or more actually unemployed than the number registered for EI. In other words, as many as 1 million or more additional unemployed workers, for whom there is federal funding to train presumably another 10,000 workers.

Many people and organizations across Canada called for the Federal Government to eliminate the two week waiting period for EI benefits, to increase the amount of the benefits which are not enough for families to survive, and to extend benefits for up to two years. In addition, they called for structural changes so that regions in Ontario, British Columbia would not be penalized because they had relatively high employment in the past. However, none of these proposals were implemented.

Recently, the Federal Government pledged to “backstop” the Asset Backed Commercial Paper investors for $1.3 billion. How many investors were there? About 2,000, a lot of whom were wealthy financiers.

That’s about the same amount as the 500,000 to 1,500,000 unemployed workers across Canada will get in the Federal budget to extend and “enhance” their EI payments. It’s not hard to see who has the priority.

Peter Ewart is a writer, instructor and community activist based in Prince George, BC. He can be reached at:

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