1. society
2. work
3. unemployment

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When Canadians go to the polls later this
En se rendant aux urnes plus tard cette année,
year, many of them will be making their choice
based on their impression of who can best
manage persistent economic uncertainty. Others
will be concerned about caring for older loved
ones or having the means to adequately provide
for their family. Others still will be assessing each
party’s response to global terrorism and domestic
radicalization.
To help inform voters’ choices, Policy Options
asked leading researchers and practitioners in
diverse fields to identify a pressing policy issue
that should be a priority in the election and to
make the case for how decision-makers can best
address it. While it certainly is not an exhaustive
list, taken together, their responses provide a
compelling agenda for public debate that all
political leaders should consider.
beaucoup de Canadiens donneront leur voix
au parti qui leur semble le mieux apte à gérer
l’incertitude économique persistante. D’autres
seront préoccupés davantage par les soins à
prodiguer à leurs aînés ou les moyens de subvenir
aux besoins de leur famille. D’autres encore
évalueront les mesures préconisées pour lutter
contre le terrorisme international et la radicalisation
des jeunes d’ici.
Pour éclairer le choix des électeurs, Options
politiques a demandé à des chercheurs et des
spécialistes reconnus de déterminer quel enjeu clé il
faudrait mettre au cœur de la campagne, et comment
nos décideurs peuvent s’attaquer à cette priorité.
Sans former une liste exhaustive, leurs réponses
composent un solide programme qui enrichit le
débat public et devrait inspirer tous nos dirigeants.
Improving social services
Making sense of the
EI/social assistance mess
Munir A. Sheikh
The employment and income-support system is a complex web of services
delivered by three levels of government. A critical challenge for the parties
will be to articulate a new vision of how to support individuals as they move
through the labour market.
Le système de soutien du revenu et de l’emploi forme un réseau complexe
de services fournis par les trois ordres de gouvernement, qui doivent
aujourd’hui relever un défi crucial : définir une nouvelle vision du soutien
offert aux personnes qui sont engagées sur le marché du travail.
s
ince the 2008-09 global recession, the Canadian labour market has been undergoing major
changes, a process that will only become more
pronounced as a result of the recent shock of lower
oil prices. The uncertainty caused by these changes will be
exacerbated even further by growing income inequality
— an issue that is sure to weigh heavily on the minds of
voters when they head to the polls later this year. A critical challenge for the parties, therefore – and a key opportunity — will be to make sense of the web of employment
and income support mechanisms and articulate a new
vision of how we should support individuals as they move
through the labour market.
Currently, support is provided by any number of specific programs delivered by all three levels of government.
At the federal level, the employment insurance (EI)
program provides benefits to those unemployed who have
a valid job loss, made sufficient contributions (funded by
them and their employers) and worked a sufficient number
of hours. These criteria, seemingly simple and straightforward, are complicated by several factors.
Munir A. Sheikh is an executive fellow of the University of Calgary
School of Public Policy and former chief statistician of Canada.
First, in addition to income support, the federal EI
program gives the unemployed access to resources for
training, but these are administered by the provinces on
behalf of the federal government. Second, regular income
benefits constitute only 66 percent of all EI benefits, with
the remainder taken up by a variety of special benefit programs to help individuals deal with major life events and
health related needs. Third, there are systemic net transfers
between provinces, regions, sectors and individuals, making coverage uneven. Finally, and perhaps most importantly, coverage is porous: in the most recent recession, for
instance, 54 percent of the unemployed (62 percent in
Ontario) did not receive any EI benefits at all.
In addition to EI, provincial and municipal governments provide social assistance (SA) to those who
don’t qualify for EI but who do meet other complex
income and asset tests. Because of the diversity in how
SA is delivered in Canada, let us focus on Ontario as an
example. The provincial government delivers the SA
component for persons with disabilities (the Ontario
Disabilities Support Program, or ODSP), while municipal
governments look after those without disabilities (in a
program called Ontario Works (OW), which is funded by
the province and delivered by municipalities). The two
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Munir A. Sheikh
Rather than tinker
with the complex system we have,
we should redesign these programs
from the ground up.
programs have the same dual objectives as EI: to help
people obtain employment and provide financial assistance while they are not working.
That said, the expectations and services delivered by
OW and ODSP are very different. In OW, clients receive
a small base benefit and are expected to work. They sign
agreements to that effect with the local government and,
in exchange, receive a number of different supports to help
find work. In contrast, ODSP clients receive a much larger
benefit but, even though many recipients want to work,
there is no expectation of employment while on ODSP and
very few receive any serious employment support services
from the province.
Three levels of governments therefore deal in relative
isolation with the same unemployed people. The complexity of the systems makes it difficult for clients to navigate
them effectively, and many individuals fall through the
cracks. For those who receive support, benefit levels are
often insufficient, particularly within the basic income
offered by EI and OW. The result is inconsistent and inefficient employment services.
Moreover, EI and SA now play a significant role in a
number of areas beyond basic unemployment assistance.
EI, for example, provides income support for a number of
different needs, including parental leave, sickness, care-­
giving for terminally ill family members, and support to
workers in the seasonal fishing industries. These benefits
are about one-third of the cost of the EI program, and are
paid for out of the payroll tax used to finance EI as a whole.
At the provincial level, OW and ODSP alone provide
more than 30 specialized benefits that are not available to
low-income workers who are not receiving social assistance. Some of these programs include disability benefits,
extended health coverage (drugs, dental, vision and other
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health-­related), a top-up to children’s benefits, a special diet
allowance, and a host of other employment-related and discretionary benefits that are approved on a case-by-case basis.
Because of the high eligibility requirements for EI,
those who require specialized benefits — sometimes also
the most in need — might not receive assistance for the
simple reason that they did not contribute enough to
EI. One might also question why these forms of assistance are funded by employers through payroll taxes.
And as for ODSP and OW, it is not clear why there are so
many specialized benefits. Those managing the system
likely spend more time figuring out the complexity,
inefficiency and inequitable design of the system than
helping beneficiaries.
There is a serious problem of logic in providing these
benefits as part of three separate employment assistance
programs. Canadians probably support the notion that
individuals facing such situations should receive benefits,
but whether those benefits should be provided through EI,
ODSP or OW is a question worth examining.
The good news is decision-makers are approaching an
ideal opportunity to address these deficiencies head on.
With major changes underway in Canadian labour markets
and the transition to a new financing mechanism for EI
in 2017, the federal governments and the provinces could
fix the major gaps between EI and social assistance. Rather
than tinker with the complex system we have, we should
redesign these programs from the ground up.
Ideally, the federal, provincial and municipal
governments would come together and work as a team:
delivering EI, OW and ODSP as three branches of one
seamless, national program that is applied as uniformly
as possible across the country, that considers the individual recipient as a whole person, and that responds
Improving social services
to people’s specific needs in a comprehensive way.
In reality, this is not likely to happen. Therefore, a
second option is to replace EI, ODSP and OW with
one unified employment support program, with all
three governments playing a role in its delivery.
In this second option, the federal government
would establish national standards and leave provinces
and municipalities to design and deliver services, an
approach similar to the one used in health care. The
federal government would transfer to the provinces
the power to determine the structure of benefits and
contributions. As a result, the distinction between EI
and social assistance would disappear, and national
standards would apply to the combined programs.
Thus, provinces would have significantly greater flexibility in designing the new system to reflect their particularities, but they would also be the primary funder
and be responsible for collecting EI contributions.
Provinces would also be responsible to determine the
optimal length of time of eligibility, depending on the
specific circumstances of their economy and the profile
of the individual in need of assistance.
A key consideration is what to
do with special benefit programs.
Each of these programs should be
carefully reviewed to determine
whether and in what form they
should be continued. A basic disability support program would most
certainly be retained. The special
benefits in the new model should
be operated apart from unemployment assistance and be funded
out of general revenues. Provinces
would deliver these specialized
benefits. By separating them from EI
and social assistance, access will be
significantly improved. No longer
will eligibility depend on whether a
person can work, is unemployed, or
what their contribution history has
been. People will get the support
they need.
What I am proposing is program transformation. It is clear
we are never going to get a perfect
version of EI or social assistance,
but we can move toward a more
efficient and better coordinated
system. If the provinces and the
federal government start with that
as an operating principle, there is
much room for improvement. n
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