Albertans pay a heavy price for UI

EDMONTON - Thousands of unemployed Albertans have been left without adequate means of support and hundreds of millions of dollars have been drained away from the Alberta economy - all as the result of radical changes made to the Unemployment Insurance system over the past ten years.

Those are just two of the findings contained in a study released earlier today by the Canadian Labour Congress in Ottawa. The study uses Statistics Canada data to paint a picture of the disturbing impact that changes to the UI system are having on individuals, communities and businesses across the country.

"All of us in the labour movement have been saying for years that the federal government has made bad decisions in the area of UI policy - particularly when they imposed brutal changes to the rules for UI eligibility in 1996," says Audrey Cormack, president of the Alberta Federation of Labour. "Now this study proves our point. Canadian workers and Canadian communities are paying a heavy price as a result of the so-called reforms."

On the national level, the CLC study shows that the changes to UI rules have dramatically reduced the support available for jobless workers. In 1997, only 36 percent of unemployed Canadians qualified for UI benefits - down from 74 percent in 1989.

The situation is even more serious in Alberta, where the percentage of unemployed workers receiving benefits dropped from 60 percent in 1989 to 27 percent in 1997. According to the CLC study, only Ontario has a lower eligibility rate (25 percent in 1997).

"The attack on working people started with the Mulroney government and has intensified under the Liberals," says Cormack. "Both governments made it more difficult for workers - especially women and young people - to qualify for the benefits they deserve. The result is that the UI system is no longer there for Canadians when they need it."

But unemployed Canadians aren't the only ones who have been hurt by the changes to the UI system, adds Cormack. She says the cuts to UI pay-outs have also caused a lot of pain for communities and businesses across the country.

The CLC study shows that an average of $660 million dollars has been drained away from the Alberta economy each year since 1993 as a result of the UI cuts - for a total of more than $3.3 billion. Between 1993 and 1997, most federal ridings in the province have lost at least $100 million - some as much as $200 million.

For example, the federal riding of Calgary Centre lost an average of $41.6 million a year in UI benefits between 1993 and 1997 - for a total of $208 million. About $39.4 million was lost from the local economy in Edmonton East during the same period - for a total of $197 million.

"We're not talking about faceless numbers here," says Cormack. "Every dollar that has been withdrawn from the UI system represents a dollar taken out of the pockets of unemployed Canadians. It's one less dollar they have to spend on their rent or providing for their families. It's also one less dollar to be spent at the corner grocery store or at the local mall. The personal and economic costs of the UI cuts have been truly staggering."

Cormack says the most tragic part of this story is that the UI cuts imposed by the Mulroney and Chretien governments were entirely unnecessary. Even during the darkest days of the last recession, the UI fund was not over-extended and there was no evidence of wide-spread abuse of the system.

To add insult to injury, Canadian workers are still paying roughly the same amount in UI premiums as they did earlier in the decade - even though it's much more difficult to collect benefits. The result is that a huge surplus has developed in the UI fund - more than $20 billion over the past five years.

Cormack says the time has come for the federal government to reassess its policies and use the UI fund for the purpose it was intended - to support unemployed workers, not as a slush fund to finance other government expenditures.

"It's clear now that the so-called UI "reforms" of the past ten years have been a disaster for workers, communities and business," says Cormack. "The time has come for the federal government to admit they made a serious mistake. The time has come for them to them to put the surplus dollars back into the UI system. The surplus should be used to restore the system - to make UI more accessible and more generous. Right now, too many people are being left out in the cold - and that's a situation that has to change."

For more information call:

Audrey Cormack, President:     483-3021 (wk)  499-6530 (cell)  428-9367 (hm)


Gil McGowan, AFL Communications:     483-3021 (wk)

*Note:  2-page backgrounder attached

AFL -- UI Backgrounder

Number of Regular UI Beneficiaries - Monthly Average (in thousands)

  1989   1990   1991   1992 1993   1994  1995  1996  1997 Decline from 1989  
 Canada   785  855  1,024   1,006   931 773   634   607  508    35%
 Alberta   59.2   56.2   67.3   69.3   63.4   52.7   43.9   38.1  25.5   57%

             Percentage of Unemployed Receiving UI

  1989   1990   1991   1992 1993   1994  1995  1996  1997
 Canada   74%   73%   68%  61%  56% 50%  45%  41%    36% 
 Alberta  60%   58%   58%  51%   45%   42%   38%   35%  27%
Percentage of Unemployed Receiving UI - Major Canadian Cities
   1989  1993  1997
 Halifax  70%  48%  29%
 Montreal  67%  61%   33%
 Ottawa  40%  39%  19%
 Toronto  43%    40%    24%
 Winnipeg  54%    36%    25%
 Regina  42%  34%  19%
 Saskatoon  50%  44%  23%
 Calgary  61%    41%    25% 
 Edmonton  49%    40%    25%
 Vancouver  63%  47%    26%
 Victoria  51%    40%    25%

Percentage of Unemployed Albertans Receiving UI - By Gender and Age Group


 1989  1990  1991  1992  1993  1994  1995  1996  1997
 Women  70%  69%   63%   58%   52%   47%   40%   37%   31%
 Men  77%  77%   72%  63%  59%   52%   47%   44%   39%
 Youth (15-24)  55%  51%  46%  38%  33%  27%  23%  21%  15%


Estimated Annual Loss in Benefits, Alberta Federal Ridings, 1993-1997 ($millions)

 Athabasca  $21 million
 Calgary Centre     $41.6 million
 Calgary East  $40.4 million
 Calgary Northeast  $37.6 million
 Calgary Nose Hill  $21.6 million
 Calgary Southeast    $19.9 million
 Calgary Southwest    $21 million
 Calgary West     $25.8 million
 Crowfoot     $15.3 million
 Edmonton East    $39.4 million
 Edmonton North    $26.7 million
 Edmonton Southeast    $26.7 million
 Edmonton Southwest  $19.9 million
 Edmonton Strathcona    $28.4 million
 Edmonton West    $36.6 million
 Elk Island     $22.1 million
 Lakeland     $26.1 million
 Lethbridge     $17.2 million
 Macleod     $19.9 million
 Medicine Hat     $14.1 million
 Peace River  $24 million
 Red Deer     $28.3 million
 St. Albert     $22.1 million
 Wetaskawin   $22.3 million
 Wild Rose     $18.9 million
 Yellowhead     $23.7 million
 Alberta Total:     $660.6 million


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