Monday, November 21, 2005

The high price all Canadians pay for federal 'pogey'

Isn't it amazing that the adminstration costs 86% of the total amount spent of the ui budget in the maratimes - who are these people helping other then themselves

The destruction wrought by federal Employment Insurance (EI, formerly UI) on eastern provinces has been widely documented for two decades. Yet the federal government keeps expanding the program.

Two years ago EI was extended to workers who quit their jobs for six weeks to care for terminally ill family members. How kind.

Trouble is, Conservative EI critic Lynne Yelich revealed last week, it cost Ottawa almost $70 million on administration to dole out $11 million in "compassionate care" claims.

Forgive me for being uncompassionate, but this is simply one more reason to abolish the whole program.

EI has an interesting if depressing history. It was Ottawa's first invasion of the provinces' responsibility for social spending and required a special amendment to Canada's constitution by the British Parliament in 1940.

UI started sensibly enough, but in 1971 it was ramped up into a gigantic vote-getter, especially in rural Quebec and the Atlantic.

The idea was to save small towns by using EI to subsidize "seasonal" jobs in fishing and forestry --jobs which hitherto had not qualified for benefits. This became known locally as "Lotto 10-42" -- work 10 weeks and loaf for the next 42.

In his excellent book "Retreat From Growth," maritime economist Fred McMahon documents the devastating effect UI inflicts on the Atlantic economy.

During the 1960s, before the feds showed up to "help," the region had almost caught up to the rest of the country. Unemployment was only slightly higher than the Canadian average, private job-creating investment was the same, and education and skill levels were rising.

Then came Lotto 10-42, along with a raft of bogus "job creation" grants to help people get their 10 weeks to qualify for benefits.

It didn't matter what the jobs were, and still doesn't -- fixing park benches, counting cars, making fibreglas caskets in Cape Breton. Atlantic political careers are won or lost on the delivery of EI make-work grants.

A maritimer who "hoards" a make-work job longer than the EI qualifying period is considered selfish. The wage rates of these bogus jobs are set exactly high enough to deliver the maximum EI benefit.

Meanwhile, real jobs frequently go begging for lack of anyone willing or skilled enough to do them, private investment lags, and Atlantic skill levels have dropped, because you can't collect pogey in school.

Ottawa might as well have handed out heroin. In some towns 90% of the people are addicted.

It got so ridiculous that in 1993 even the federal Liberals decided to scale it back. Resentment flared, and the Liberals dropped from 31 Atlantic seats to 11 in the 1997 election. Benefits were later significantly restored.

The question is, who will end this ridiculous program?

Well, not the federal Liberals. Nor the federal Conservatives. Nor the "have-not" provincial premiers. Politically they can't.

Only the premiers of the "have" provinces, Alberta, Ontario, Saskatchewan and B.C., have a motive to end it, because their workers are paying for it through higher-than-necessary EI premiums -- $800 annually per Albertan and $900 per Ontarian.

Until the "have" province premiers push for a constitutional amendment restoring EI responsibility to the provinces, nobody will fix the problem, and the whole country will go on paying the price.

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