Experts weigh in with mixed reviews
The Parti Québécois, elected in the province’s September election, promised to fight to bring employment insurance back under provincial control during its campaign.
Party leader Pauline Marois said the province needed a Quebec system of EI for its unemployed in a translated news release from the campaign period.
Right now it’s just a campaign promise that would need to be followed up on and legislated before it becomes something payroll professionals need to administer.
The Canadian Payroll Association (CPA) following the outcome of the election promise, said Patrick Culhane, president of the Torontobased association.
“Our advocacy mission is having payroll legislation that is efficient and effective for all stakeholders, that’s employers, employees and the government,” he said.
The association is waiting to see what the Quebec government plans to do with the program before it decides if it would be an effective policy change, he said.
“I give the Quebec government credit for the reduction in red tape that has already taken place,” he said, citing the co-ordination of the province’s occupational health and safety commission (CSST) remittance and the Revenue Quebec remittance. It also made the two remittances based on actual pay.
“They’ve actually been, frankly, a leader in that, with the coordination of those two major remittances and having it based on actual pay,” he said.
The association is monitoring this election promise at the federal and provincial level, said Culhane.
“We would actually monitor it in two ways. We have our federal government advisory council that reviews federal legislation, because any change provincially would affect the current federal program,” he said, adding Service Canada has made some great strides reducing the paper burden in recent years by improving electronic administration of the Employment Insurance Act.
“Similarly, we have the Quebec government relations advisory council that monitors Quebec legislation and works with representatives on the Quebec government,” he said.
If there are changes, the association will be waiting for the time when legislation comes up for public comment. At that time it would make comments on the legislation and regulations.
If the election promise becomes legislation, the act governing EI would be amended or changed, and then corresponding regulations would be created.
At that point the association, as a representative of employers, would look at the most efficient way to administer such regulations, said Culhane.
“So we wouldn’t take a position whether or not, at a political level, it’s right or wrong,” he said. “But we would look at it from an employer’s administrative efficiency perspective and speed and accuracy of payments to the claimants.”
Of course, there are those who are looking at the election promise at the political level. As a potential economic policy, the idea has gotten mixed reviews from political experts.
The idea would mean significant direct costs for the province, said Michael Mendelson from the Caledon Institute of Social Policy.
“The consequences would be significant additional costs for Quebec, direct costs, but more than that it would increase Quebec’s risk profile. So from that perspective it might result in a downgrading or even a higher interest rate on outstanding Quebec debt,” he said.
If Quebec were to take EI on provincially, the risks would be great when another downturn hits the economy, said Mendelson.
“At that point in time Quebec would have to carry the entire cost of the addition employment insurance being paid to itself,” he said.
The Parti Québécois hasn’t been specific about what parts of the program it would be looking to change if it took over the insurance, said Mendelson.
If the province is looking for EI reform the government might be better off to form a coalition with other provinces who want to make changes to EI, such as Ontario, and work towards modifications that way, said Mendelson.
“I would say to Quebec (that) it’s dangerous and costly for Quebec to take on all of the risk of additional unemployment on itself rather than with all of Canada,” he said.
But there are those who think it is a good idea for the province to take this on as well since it already handles its own pension program and parental benefits.
The logistics of switching EI to a provincially run program for Quebec would be complicated, but Tom Flanagan, a professor at the University of Calgary, thinks it would make economic sense.
“When I saw that they were asking to try and get control over employment insurance I thought, well gee whiz, if they’d like to have it, wouldn’t it be great if we could give it to them?” he said.
EI has been badly distorted over the years by federal politicians giving away other people’s money, said Flanagan.
“I think there’d be less incentive to distort it if its legislated in a smaller jurisdiction and politicians have to raise the money themselves to pay for whatever the benefits are going to be,” he said.
The system now doesn’t give people a lot of incentive to move to where jobs are if they live in an economically depressed area, he said.
“I think there are all kinds of things wrong with (employment insurance) and I think that some of those things would be better if the provinces had to run it themselves as they do in the United States where employment is a state responsibility and originally was in Canada too,” he said.
Melissa Mancini is a Toronto-based freelance writer.
