Canada’s self-employed ‘get little’ from proposed EI changes

Proposed legislation to allow the self-employed to opt into the federal employment insurance (EI) plan falls too short of what freelance and casual workers in Canada really need, labour advocacy groups say.

The Fairness for the Self-Employed Act seeks to extend maternity, parental, adoption, medical, and compassionate care benefits to self-employed workers.  

But labour groups say the one-year wait before self-employed workers can claim these benefits significantly diminishes their value.   

A provision in the Act says workers can sign up for the plan starting January 1, 2010, but can’t claim any benefits until a year later. 

“Why do they need to wait a year,” asks labour leader Allison Dubarry, who is an IT analyst at the University of Toronto.  “Things are pretty tight now for a lot of self-employed people.”   

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She says thousands of self-employed are in a Catch-22 situation. “The self-employed would like to opt into the EI program but in this economic environment many will not be able to benefit from the changes.” 

An SAP developer, Dubarry is also president of Steelworkers Union Local 1998 at the U of T and is familiar with the plight of many freelancing and contract IT professionals.

She says many contract IT workers would fall between the cracks if a soft labour market prevents them from meeting the one year EI enrolment requirement. 

“Thousands of people in the IT industry survive on contract and freelance work. How do you expect them to pay their EI dues if they suddenly lose their assignments?”   

An ailing EI system 

Another Toronto-based labour advocate also had strong words for to describe government’s proposed bill. 

“This small tweak falls short of bringing the broken EI system back as a universal social program,” according to John Cartwright, president of the Toronto and York Region Labour Council and a member of Good Jobs for All Coalition. 

The Coalition is an alliance of around 35 community, environmental, labour and student groups across the Greater Toronto Area. 

“It’s workers who built the EI fund, not the government,” Cartwright said. “But over the years a series of administrations have gutted the system.” 

In March this year members of Good Jobs for All Coalition staged several protests demanding EI reforms as scores of Ontario firms bled jobs, when the recession started slashing their profits. 

Extending parental leave to self-employed workers was a campaign promise of the Tories in the last elections. The party estimated that extending EI benefits to the self-employed would cost some $147 million. 

“Self-employed Canadians should not have to choose between their family and business responsibilities,” Diane Finely minister of human resources, told reporters on Wednesday.  

Extending access to these benefits is the fair thing to do,” she said.

The government could do better, according to Cartwright. 

For instance, he said the current jobless rate in the GTA stands at around 10.1 per cent of the total workforce population for the area but despite a $57 billion surplus in the EI fund, only one-third of that number are able to benefit from the EI system. 

“Contrast that with the 1980s and 1990s recessions, when as much as 80 per cent of the workforce got EI benefits,” said Cartwright. 

H1N1 can kill … your business 

The U of T’s Dubarry is also worried about the destructive, and potentially lethal, impact of H1N1 and other outbreaks on the self-employed.  

Regular employees, she noted, are entitled to paid sick days and so aren’t financially hit by having to spend  three to five days in bed if they contract H1N1.  

“But for the self-employed, freelancers, and casual workers it’s no work, no pay.”   

Being bed-ridden for several days could force a freelance designer or programmer to delay or even give up a project. Longer than that and the worker runs the risk of not being contacted again for another assignment, she noted. 

When regular workers are off work for several weeks or months, they have short-term and long-term disability benefits to rely on and by law cannot be laid off, said Dubarry. 

“Tough luck if you happen to be self-employed. Being away that long could mean losing your regular clients and long, hard work to get new ones.”   

“Lower the barriers”

Dubarry and Cartwright of the Toronto and York Region Labour Council believe EI shortcomings can be rectified by lowering the barriers that prevent people from opting into the system. 

For instance, the number of hours worked required to qualify for EI varies depending on the regional unemployment rates.  

Qualifying hours in Ottawa, Calgary and Vancouver can be as high as 700, while in high unemployment areas, such as Manitoba and Saskatchewan, they are as low as 420 hours. 

The Good Jobs for All Coalition is seeking a universal 360 hours of qualifying work time for workers nationwide. 

“If the government is sincere about allowing the self-employed to gain EI access, then these workers should be required the same amount of qualifying hours as regular workers are,” said Dubarry. 

The organization is also seeking that benefits be raised from 55 per cent to 60 per cent of the best 12 weeks of the previous work year. They also want the benefits to be extended to 50 weeks from the current 45. 

Cartwright said the U.S. government, in response to the economic recession, is even allowing its EI recipients an extension of up to one year. 

He said the Conservatives are now sitting on an EI fund that has more than enough to cover the needs of all unemployed Canadians. 

The EI fund surplus held by the government was about $57 billion in March 31, 2008. According to the chief actuary of the EI program that surplus could reach $58 billion this fall, Cartwright said.

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Jim Love, Chief Content Officer, IT World Canada

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