October 17, 2001: "National Program of Recovery" Required

October 19, 2001


October 19, 2001

SENT BY FAX - 613-992-6382

Hon. Jane Stewart
Minister of Human Resources Development
House of Commons
Ottawa, ON

Dear Minister:

I am writing to you on issues of urgent and immediate concern. Given the state of the economy prior to September 11 and given that the events of September 11 have been devastating to the economy, leading to tens of thousands of workers being laid off in several sectors of the economy including airline, aerospace, auto and hospitality, to mention just a few, I am urging your government to act immediately to address the needs of thousands of working people across Canada.

Our union has written the attached statement that has been adopted by the leadership of our union.

For your information the highlights that we are requesting your government to act on immediately are as follows:

1. We need emergency relief on E.I. rules.
  • Waive the 2 week waiting period.
  • A special extended benefit period is required.
  • Apply a uniform 360 hour requirement for benefit eligibility.
  • Take immediate action to address the backlog in EI claim processing.
  • 2. Make E.I. work sharing programs more flexible.
    3. Government should make a special contribution to EI funding while unemployment is high.
    4. There must be no reduction in EI premiums this year.
    5. Training and new human resource commitments must become a national priority.
    6. Workforce Adjustment Programs must be given special funding, with national standards across the country.
    7. Special assistance programs are needed to allow senior and older workers to leave the work force with dignity and a decent income.

    I am requesting an immediate meeting with you to discuss these issues.

    Your urgent attention is required and appreciated.

    Yours truly,

    BASIL 'BUZZ' HARGROVE
    President

    cc: Right Hon. Jean Chrétien, Prime Minister
    Stockwell Day, Leader of the Opposition
    Right Hon. Joe Clark, Leader of PC Party
    Alexa McDonough, Leader of the NDP
    Gilles Duceppe, Leader of the Bloc Quebecois
    Ken Georgetti, President Canadian Labour Congress
    CAW National Executive Board
    CAW National Representatives



    October 17, 2001:

    "National Program of Recovery" Required

    When we recall the way the last two recessions unfolded, the one at the beginning of the 1980s and the one in the early 90s, we know that something very different is happening this time. A bit like being force marched down the stairs and suddenly finding a gaping hole in front of you.

    The early signs of trouble were there in the spring and summer. Unemployment claims were mounting by April and there were rumblings from employers about a lack of orders. Exactly when the deeper problems became obvious to each of us is partly a matter of where we live and what sector we work in. The aftermath of September 11 has been catastrophic, especially in the airline, aerospace and hospitality sectors but it is most certainly not the whole of the story.

    Obvious now to one and all, it is working people across this land who are taking the heaviest pounding in the current crisis. And getting the least attention from those who have the power to shape a political and economic response to that crisis. It is not just equity funds that are "whipped" or that "bleed" as the business media describes the problem.

    And as with a crisis during a critical illness - the point at which the patient either sinks fast or takes a turn for the better - we need to act, and act quickly.

    Even with slow onset recessions, there has always been a need to act immediately to slow the ravages of joblessness, the resulting poverty and desperation for families and entire communities, and to avoid a full-scale depression. And this is not your ordinary recession.

    Job markets can often tell us more than stock markets can about the health of our economy. And not just the official job numbers, as troubling as we all find a 7.2% unemployment rate that will rise even further. Statistics Canada will be a long time capturing the numbers that go with the layoff notices that have been issued but not yet taken effect. Most working people have already "captured" that reality and know what looms in front of us. It's possible to know what's really happening simply by listening carefully to our co-workers, family, friends and community leaders. Parliamentarians who wait for the official numbers are missing the point. Recovery measures delayed are recovery measures denied - in industries ranging from the airlines to auto assembly and auto parts, and from hotels to nursing homes.

    Extraordinary events demand extraordinary measures. A "National Program of Recovery" is essential.

    In looking for the kind of fiscal and other stimulus measures that will quickly infuse the economy with government spending and resources, we need to focus on those households that will actually spend the income they receive and keep the money circulating within their communities.

    One of the most obvious and necessary measures will be a loosening of unemployment insurance rules imposed with the EI reforms of 1996. Now would be a very good time to test out, even if on a temporary basis, the kind of system that labour unions, women's organizations, faith groups, anti-poverty groups and others have been telling us will actually deliver benefits to the unemployed. Right now benefits are going to only about 1 in 3 of the unemployed Canadians who are seeking work.

    1. We need emergency relief on E.I. rules.

    There is an urgent need for relief on the usual EI rules, many of which make no sense in the current crisis.
    2.
  • Waive the 2 week waiting period. Under present conditions, it seems absurd to carve out a two week period at the beginning of a claim when no benefits are paid to the laid off worker.
  • A special extended benefit period is required. We would propose an additional 26 weeks at this stage. In all events, a worker who is otherwise eligible for benefits should be able to count on at least 1 year of benefits if they cannot find work.
  • Apply a uniform 360 hour requirement for benefit eligibility. Right now the required hours depend on the worker's individual hours and local EI region unemployment rates. Starting at 420 hours, the requirement can run as high as 910 hours for new entrants. Again, the rule doesn't make sense under crisis conditions, if it ever did. This is not a situation where people are losing employment because of their own work history. Furthermore, the official unemployment rates that EI uses to establish a worker's eligibility and the duration of their claim do not reflect the real levels of unemployment that are quickly befalling communities.
  • Take immediate action to address the backlog in EI claim processing. The government must expedite the processing of benefit claims which has deteriorated to the point where it takes 2 to 3 months to get a first benefit cheque in some regions. The same problem exists with training approvals. While some improvements have been noted, the delays are still absolutely unacceptable.
  • 3. Make E.I. Work Sharing Programs More Flexible.

    The EI Worksharing program was used extensively in the run-up to the last two recessions. The point of EI Worksharing is to prevent an avalanche of regular layoff claims and the EI costs attached to them. While some of the media now rails against what they call "special treatment" for airline workers seeking Worksharing benefits, nothing could be farther from the truth. These attacks should be named for what they are, an assault on workers' rights to unemployment insurance. There is no special treatment here; there are already many Worksharing programs in place and they are policed by no end of regulation and standing policy. At this critical moment, those rules should be eased and more flexibility introduced, especially with regard to the requirement for so-called "recovery plans". The same need for flexibility applies to the EI Workforce Reduction Program which permits employers to lay off workers who volunteer for the layoff to allow a junior worker to keep their job. At the moment, that only regulation under this program is one that's restricted to permanent layoff situations. In the current crisis, it's very difficult to name a layoff as permanent or temporary. Another regulation is urgently needed.
    4. Government should make a special contribution to EI funding while unemployment is high.

    The government has not contributed a cent to the EI system since Brian Mulroney dropped that requirement in 1989. For more than a decade it has been only workers and their employers who pay into EI. The government gets to keep the difference between the premiums collected for EI and the amount that goes out as benefits to the unemployed. By cutting back on those benefits with the "EI reforms" of the 1990s, the government has been able to build a very healthy $40 Billion EI surplus since 1994. We need that money in the system. For every 1% increase in national unemployment rates, there's a $1.5 Billion EI account impact - and that's only counting the costs of current EI benefits. An improved EI program would add to those costs.
    5. There must be no reduction in EI premiums this year.

    The government is in the process of reviewing current premium rates for the year 2002. The business community has always advocated for premium reductions and have largely had their way in recent years. This is not even remotely an option now.
    6. Training and new human resource commitments must become a national priority.

    One of the major flaws with the current program is the unnecessarily complicated procedures and paperwork to get permission to take training or schooling while on benefit (and a separate set of paperwork to secure tuition supports). As well, unlike the past, there is a requirement to "shop" for a training provider and a requirement for most workers to contribute to the costs. E.I. income supports for training have dropped incredibly, from over $1 billion annually in 1993 to roughly $200 million a year in 2000, with virtually no dollars coming from general government revenues.
    7. Workforce Adjustment Programs must be given special funding, with national standards across the country.

    There are a wide array of services and programs that laid off workers need in order to adjust to their new reality. In the past, we had a federal Adjustment Program (IAS) to assist with the development of worker adjustment programs. Now, however, we have only spotty and inadequate government commitments, and that is true whether a province has a labour market agreement with the federal government or not. Workers must be supported by government to operate help centres and adjustment programs, jointly with their employers. We also need special adjustment programs to assist those who face multiple barriers in seeking re-employment. Immigrant workers, aboriginal workers, workers of colour, women and workers with disabilities already suffer from discrimination in the workforce; we need to be doing something to overcome that.
    8. Special assistance programs are needed to allow senior and older workers to leave the work force with dignity and a decent income.

    For many years we had a Program of Older Worker Adjustment in this country and other programs to assist those who were over 45 years of age when they lost their job. The current crisis should cause us to again direct attention to the special adjustment needs of this group. We also need to design supports for their voluntary bridging to retirement, especially for those in their fifties.

    Today, October 17th, marks the International Day for the Eradication of Poverty. The United Nations has called on governments to present "concrete activities" to address growing poverty in their society. A National Program of Recovery directed to the many workers in this country now on layoff, on notice of layoff or at risk of layoff would move us some considerable distance towards that goal. A human tragedy is otherwise in the making.

    ADOPTED BY THE CAW NATIONAL EXECUTIVE BOARD, OCTOBER 17, 2001


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