Movement for Canadian Literacy

Basic Skills and the Bottom Line:

Context

It is our understanding that proposed changes to Canada's unemployment insurance system are a key part of a plan to fundamentally restructure the federal government's approach to national labour force development. In simplest terms, this restructuring is expected to create savings for the federal government by reducing the number of unemployed Canadians who will be eligible to receive benefits and by reducing the overall amount of wage replacement benefits that eligible unemployed Canadians will receive. At the same time the government will increase federal investment while decreasing federal control over labour force development initiatives.

We've been told that proposed changes to the (un)employment insurance system will result in an annual savings for HRDC in the order of $2 billion, and that this savings is in addition to savings of a similar magnitude that have already been realized by other recent cuts to Unemployment Insurance.

Of the $2 billion savings to be realized through Bill C-12, HRDC is expected to redirect $800 million into five types of "active supports" to help Canadians get back to work:

• targeted wage subsidies;
• earnings supplements to induce low wage employment;
• self-employment programming;
• job creation partnerships; and
• skills loans and grants.

The $800 million proposed for "active supports" represents a 42% increase in HRDC spending on similar supports in 1994-1995. Money for this increase will come from reductions in wage replacement benefits and tougher eligibility requirements.