# EI: Entitlement, Right or Insurance



## Lightguns (5 Jan 2014)

This came out on another thread and I did not want to go off topic. 

In 1972 UI paid one days pay for every week worked and the length of collection was limited only to the amount of time you had worked.  There was no UI for quitters or retirees. Trudeau changed this to 70% of your pay for up to 52 weeks with only 8 weeks work. Almost overnight in Atlantic Canada there was a labour shortage in winter seasonal work. 

There has been changes but no government has returned the program to an unemployed safety net.  Preferring instead to use EI as a self financing regional subsidy to discourage independence amongst the poorest workers. 

Is EI a government entitlement or workplace financed insurance program?

Edited for grammar.


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## George Wallace (5 Jan 2014)

Lightguns said:
			
		

> Is EI a government entitlement or workplace financed insurance program.



Just for X Royal:  Who signs the cheques?


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## Lightguns (5 Jan 2014)

Certainly it is not insurance. The allows repeat users to draw benefits year after year without any premium increase. The program is arbitrary; a lobster boat captain can draw EI on his self employed earnings but a farmer cannot.


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## a_majoor (5 Jan 2014)

Perhaps the system shoudl be changed to a true insurance model: you insure some or all of your income, and your premium is based on how much income you insure.

Income insurance would reverse the incentives; people with low paying jobs would be looking to upgrade, work full time or otherwise get more income (living off 8 weeks of part time or seasonal wages would not be a rational choice) since the income insurance system would not offer high payouts for part time or seasonal work. High income people might choose not to insure all their income, but contract workers with irregular income streams might want to do so.

And of course, since this is a true insurance system, the Federal Government would not be able to get their hands on the accumulated premiums in the fund (perhaps the biggest bonus of all). Indeed, with the appropriate legislation, "II" would not even be a government program at all. Just go shop around with a friendly insurance broker.


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## Halifax Tar (5 Jan 2014)

I'm drawing EI right now while on PATA leave.  I have contributed to this program my whole working life and I feel no remorse getting to draw some from it. 

Lightguns do you feel this is an abuse ?


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## Lightguns (5 Jan 2014)

Halifax Tar said:
			
		

> I'm drawing EI right now while on PATA leave.  I have contributed to this program my whole working life and I feel no remorse getting to draw some from it.
> 
> Lightguns do you feel this is an abuse ?



Of course not anyone who pays into the system for great lengths of time should not feel they are abusers if the system. Why would you think it's an abuse?  MATA is a valid social program in an age of 2 income families.  I am speaking of generational EI users. Work 10 weeks take 40 off plus your 2 weeks waiting period. Or my NB favourite go on EI and work for your employer for cash. 

I met a lady the other day who says EI is her Right as an Acadian to keep her nation together on their native soil to resist English oppression. That's an interesting reason for generational EI dependence.


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## Lightguns (5 Jan 2014)

The insurance model is exactly where I was hoping the discussion would and you have laid it out nicely. No government beyond the legal framework. What effect that would have the social aspect would be interesting as much of the off season work in the high EI use areas is no mechanized. There is a huge cash economy in the poorest parts of Canada so the work is there.


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## George Wallace (5 Jan 2014)

Lightguns said:
			
		

> I met a lady the other day who says EI is her Right as an Acadian to keep her nation together on their native soil to resist English oppression. That's an interesting reason for generational EI dependence.



That is one of the most absurd things I have ever heard.  Was any inbreeding a factor here?


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## Halifax Tar (5 Jan 2014)

Lightguns said:
			
		

> Of course not anyone who pays into the system for great lengths of time should not feel they are abusers if the system. Why would you think it's an abuse?  MATA is a valid social program in an age of 2 income families.  I am speaking of generational EI users. Work 10 weeks take 40 off plus your 2 weeks waiting period. Or my NB favourite go on EI and work for your employer for cash.
> 
> I met a lady the other day who says EI is her Right as an Acadian to keep her nation together on their native soil to resist English oppression. That's an interesting reason for generational EI dependence.



No worries just wanted to be sure.


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## marinemech (5 Jan 2014)

One day, it will not be there, as the EI well will be dried up. I only had to be on it twice in the last 10 years, i did not want to go on it, 1st time i was on it for 6 weeks due to a really lackluster economy, after the bubble burst in the US in 2008/9. Second time was a bit longer and intentional, as i was going to school so i got special permission to bend the rules, and was on it 3 months, then i found temp work till school started and then again for another 10 months, so a total of 13 months, they allowed me to overdraw by a fair bit.

Depending on the circumstance it can be a entitlement(going to college in a town of 1500 people where most things are closed during the winter), it is a insurance for times, like right now where the economy is not so hot.


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## Infanteer (5 Jan 2014)

Thucydides said:
			
		

> Perhaps the system shoudl be changed to a true insurance model: you insure some or all of your income, and your premium is based on how much income you insure.
> 
> Income insurance would reverse the incentives; people with low paying jobs would be looking to upgrade, work full time or otherwise get more income (living off 8 weeks of part time or seasonal wages would not be a rational choice) since the income insurance system would not offer high payouts for part time or seasonal work. High income people might choose not to insure all their income, but contract workers with irregular income streams might want to do so.
> 
> And of course, since this is a true insurance system, the Federal Government would not be able to get their hands on the accumulated premiums in the fund (perhaps the biggest bonus of all). Indeed, with the appropriate legislation, "II" would not even be a government program at all. Just go shop around with a friendly insurance broker.



I concur with this - it should be like auto insurance.  My premiums should be going down since I've never used EI.


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## PPCLI Guy (5 Jan 2014)

Infanteer said:
			
		

> I concur with this - it should be like auto insurance.  My premiums should be going down since I've never used EI.



 I am okay with 40% plus of my salary financing general government programs - it comes with citizenship.  I am not okay with financing a specific benefit with contributions tied to that benefit if I will never draw from the fund.

I have never collected, and will never collect EI benefits.  I should be able to opt out of the entire scheme.


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## Infanteer (5 Jan 2014)

Car insurance is mandatory, I don't see a huge problem if EI is the same.  However, my car insurance premiums are pretty low as I don't purchase comprehensive and I don't get in accidents - I want that same effect with EI.


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## Nemo888 (6 Jan 2014)

No one has ever figured out how to have capitalism and full employment. There seems to be no way to have full employment and free markets. Since unemployment and cyclical economic highs and lows are inevitable with the current system a safety net like mandatory employment insurance seems reasonable. Currently the premiums are much too high as the surplus is taken by the government to fund other programs. 

I like the idea of raising premiums on repeat users.


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## George Wallace (6 Jan 2014)

PPCLI Guy said:
			
		

> I am okay with 40% plus of my salary financing general government programs - it comes with citizenship.  I am not okay with financing a specific benefit with contributions tied to that benefit if I will never draw from the fund.
> 
> I have never collected, and will never collect EI benefits.  I should be able to opt out of the entire scheme.



Only problem with that is that you will not know that you will never collect, nor able to collect, until after the fact.


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## Kat Stevens (6 Jan 2014)

I was 48 years old the first time I went on EI, never saw it coming, and if it had not been available to me, I would have been well and truly fucked.  Senior officers don't usually have that problem though, people seem to line up to throw money at them.


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## Lightguns (6 Jan 2014)

Roger that. In 94 I moved from Ottawa to Fredericton and had to fight two appeal boards for my one and only drawing. I was refused EI because I moved from a place high employment to a place of high unemployment. I was 2/3 through my time period before I saw cheque and then only because of a lawyer friend.  It was a piss from especially all the professional students who worked summers to go to university winters and collect EI under the radar.


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## X Royal (6 Jan 2014)

One question that should be asked is where are the funds for EI coming from?
Not the government but employees and their employers.
Yes the government administers the program but they don't fund it.
Ever wonder why they have made it harder to draw benefits, it's simple the more surpluses in the fund the more they can siphon off.


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## George Wallace (6 Jan 2014)

X Royal said:
			
		

> One question that should be asked is where are the funds for EI coming from?
> Not the government but employees and their employers.
> Yes the government administers the program but they don't fund it.
> Ever wonder why they have made it harder to draw benefits, it's simple the more surpluses in the fund the more they can siphon off.



And where do you think Government revenues come from?  "Not from the government"; but from John Q Public and Business.  As I asked you earlier, "Who signs the cheques?"  The Government.  They collect it from you, me, every other employee and 'Business' through Taxes, and then administer the movement of those monies and all payments there of.


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## X Royal (6 Jan 2014)

Nemo888 said:
			
		

> I like the idea of raising premiums on repeat users.


I like the idea of leaving the funds in the program for which their collected and adjusting down the premiums if surpluses are getting up there.
As for raising premiums for repeat users I think the system of reduced benefits for them is the way to go.


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## X Royal (6 Jan 2014)

George they collect EI premiums to fund that program not the general fund. Premiums are based on money earned as are the benefits. 
Problem is they also use these funds to beef up the general fund by making it harder to draw benefits. Leave the money separate and reduce premiums if surpluses grow over a certain level.


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## X Royal (6 Jan 2014)

One other thing is on my pay stub it says EI insurance premiums not Federal Tax for the money that goes into the program.


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## George Wallace (6 Jan 2014)

X Royal said:
			
		

> As for raising premiums for repeat users I think the system of reduced benefits for them is the way to go.



I like that idea as well.


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## Remius (6 Jan 2014)

George Wallace said:
			
		

> I like that idea as well.



Sounds good but then you would have to penalise people that go on MATA/PATA more than once, seasonal workers would take a hit as well.


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## George Wallace (6 Jan 2014)

X Royal said:
			
		

> George they collect EI premiums to fund that program not the general fund. Premiums are based on money earned as are the benefits.
> Problem is they also use these funds to beef up the general fund by making it harder to draw benefits. Leave the money separate and reduce premiums if surpluses grow over a certain level.



When it boils down to it, is it not just another "tax"?  Sure it is supposed to go into a program that is called "Employment Insurance", but individuals who really want to, can create their own "savings for rainy days" to cover periods of unemployment.  It is an idea thought up and developed by a "socialist" in government, passed and implemented by the Government.  You have GST and other taxes on the Fuel you buy for your auto, all of them supposedly dedicated to paving roads, the environment, Provincial coffers, etc.  EI is no different.  

If you are concerned about the Government raiding those funds for other reasons, then think of our CAF/RCMP Pension Funds that were also raided and monies skimmed off.  There are numerous other instances where Treasury Board ( who govern all the movement of Government monies ) has approved the Government's dipping into different Funds.  Is the way that the Government handles its finances really any different than the way any individual may be handling their personal finances?


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## George Wallace (6 Jan 2014)

Crantor said:
			
		

> Sounds good but then you would have to penalise people that go on MATA/PATA more than once, seasonal workers would take a hit as well.



I suppose, but in the case of some seasonal workers, there are thousands of cases where these "seasonal workers" are third or fourth generation EI dependent.  It has become a way of life for some families, and I am not thinking of the Farm workers, nor those in the occupations that are truly Seasonal.  I am thinking of those who only work seasonally, and then "vacation"; otherwise abusing the system.  (Perhaps Welfare Cases would be too strong to use.)   Go back to this interesting case:



			
				Lightguns said:
			
		

> I met a lady the other day who says EI is her Right as an Acadian to keep her nation together on their native soil to resist English oppression. That's an interesting reason for generational EI dependence.


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## Remius (6 Jan 2014)

Not disagreeing with that.  I myself overheard a claimant ask how many weeks he had to work before he could go back on EI again at an HRDC when i was touring them as a recruiter.

We just have to be careful of some things like MATA and true seasonal workers (fisheries is a prime example) that rely on EI to be able to function.


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## dapaterson (6 Jan 2014)

Fisheries is a bad example. If it's not a viable job, don't prop it up.


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## George Wallace (6 Jan 2014)

dapaterson said:
			
		

> Fisheries is a bad example. If it's not a viable job, don't prop it up.



Do you say the same about Farmers?


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## Remius (6 Jan 2014)

dapaterson said:
			
		

> Fisheries is a bad example. If it's not a viable job, don't prop it up.



Actually you have to look at it from an industry perspective.  It is an industry worth billions in Canada.  And is the economic engine of hundreds if not thousands of communities. The job itself may not be viable but the industry is.  You either need seasonal workers (which leads to EI unfortunately) or you bring in foreign workers.  Either the ressource will be eploited one way or the other.  People are already leaving those comunities to begin with.  Adding EI restrictions on those workers that do stay would potentially cripple the industry.


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## Bruce Monkhouse (6 Jan 2014)

PPCLI Guy said:
			
		

> I am okay with 40% plus of my salary financing general government programs - it comes with citizenship.  I am not okay with financing a specific benefit with contributions tied to that benefit if I will never draw from the fund.
> 
> I have never collected, and will never collect EI benefits.  I should be able to opt out of the entire scheme.



Ouch.
Pink Floyd may have said it best....."I'm alright Jack, keep your hands offa my stack."
Consider yourself lucky, many who thought they were golden turned out not to be.....


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## Lightguns (6 Jan 2014)

Interesting discussion. When I was kid which was about when Trudeau changed the UI system. Seasonal workers worked Planting in the spring, fishing or tree thinning in the summer, picking in the fall and cutting pulp in the winter.  In 74 my uncle had labour shortage on his wood lot. The workers were still around but now they were all snug in their homes on UI. The result was that he like many others bought sliders to keep his business going.  In short maritimers moved to the next job.  An insurance that insures everyone and always pays is doomed to failure in the market place. This insurance survives only by the government raising rates so it can raid it in hard times.


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## ballz (6 Jan 2014)

I am instinctively in support of privatizing income insurance, but I'd like to do an objective comparison.

I just Googled some stuff about auto insurance companies and had no problems finding the info I needed. However, I am having problems finding it for the Gov't of Canada for some strange reason (I remember this being easy to find last time I tried). Does anyone know where I can get the latest financial sheets (Balance Sheet, Income Statement, Cash Flow, etc) for the Federal Gov't? Or more specifically the EI program?

EDIT to add:

Found some of it... still looking for more info though.


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## Edward Campbell (6 Jan 2014)

Infanteer said:
			
		

> Car insurance is mandatory, I don't see a huge problem if EI is the same.  However, my car insurance premiums are pretty low as I don't purchase comprehensive and I don't get in accidents - I want that same effect with EI.




But you are "rewarded" for safe driving ... well, not really, you are punished for anything the insurance industry regards as less than perfect conduct. In an "employment insurance" scheme I would think that when you achieve a status as, say, a CF member who will go out on a pension which will (it used to, anyway) preclude you ever drawing EI, then I would hope that your EI premiums would be drawn down to near zero. The analog might be a person who has no car: he pays no car insurance premiums. A person who cannot, possibly, collect EI ought not to be required to pay "insurance" premiums either, should (s)he? Of course that never happened to me and I'm guessing it's not happening to PPCLI Guy, either.


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## Halifax Tar (6 Jan 2014)

E.R. Campbell said:
			
		

> But you are "rewarded" for safe driving ... well, not really, you are punished for anything the insurance industry regards as less than perfect conduct. In an "employment insurance" scheme I would think that when you achieve a status as, say, a CF member who will go out on a pension which will (it used to, anyway) preclude you ever drawing EI, then I would hope that your EI premiums would be drawn down to near zero. The analog might be a person who has no car: he pays no car insurance premiums. A person who cannot, possibly, collect EI ought not to be required to pay "insurance" premiums either, should (s)he? Of course that never happened to me and I'm guessing it's not happening to PPCLI Guy, either.



Except for MATA/PATA.  How would that work into the equation ?


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## GAP (6 Jan 2014)

E.R. Campbell said:
			
		

> But you are "rewarded" for safe driving ... well, not really, you are punished for anything the insurance industry regards as less than perfect conduct. In an "employment insurance" scheme I would think that when you achieve a status as, say, a CF member who will go out on a pension which will (it used to, anyway) preclude you ever drawing EI, then I would hope that your EI premiums would be drawn down to near zero. The analog might be a person who has no car: he pays no car insurance premiums. A person who cannot, possibly, collect EI ought not to be required to pay "insurance" premiums either, should (s)he? Of course that never happened to me and I'm guessing it's not happening to PPCLI Guy, either.



But CF members are eligible for MATA/PATA LEAVE which is EI based. It could still be a lower rate because of what you pointed out, but likely not zero.


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## larry Strong (6 Jan 2014)

GAP said:
			
		

> But CF members are eligible for MATA/PATA LEAVE which is EI based. It could still be a lower rate because of what you pointed out, but likely not zero.




When a CF member goes on M/PATA leave, are you on "leave with out pay"? Not trolling, I do not know the answer.


Thanks for your help
Larry


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## Halifax Tar (6 Jan 2014)

Larry Strong said:
			
		

> When a CF member goes on M/PATA leave, are you on "leave with out pay"? Not trolling, I do not know the answer.
> 
> 
> Thanks for your help
> Larry



It seems hazy to me because I still get a portion on my CF pay rate to "top up" EI.


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## Strike (6 Jan 2014)

AFAIK, being on MATA/PATA is being on LWOP.  The amount that DND 'tops up' is not considered pay but a benefit, which is why EI is not affected.  That's also why you are not putting anything into either your pension or EI with what DND is giving you.


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## Brad Sallows (7 Jan 2014)

To reiterate what I've written here before, EI is not properly insurance.  For some people (long-term employed who rarely are out of work) it functionally can be insurance.  Otherwise, it is chiefly a wage subsidy.  I remain unconvinced that a select few categories of workers in certain regions of the country should be able to work less than a year to support themselves for a year, while others must work all year round.  EI is, bluntly, capricious and unfair - something no government entitlement should be.  Economically, it reinforces failure and retards success.

The additional paid social leave entitlements that were grafted on in recent years were introduced because of the surplus funds sloshing around in the pot.  The genuine merits of what those programs deliver are irrelevant; they should have been funded out of general revenues if they are worthwhile and the government should have raised taxes accordingly.

Real unemployment insurance can be purchased as a financial product without the government holding your hand.  Or, you can self-insure (ie. respect the "6" in the 10/10/6 rule - or use 10/10/3 if you are a little stretched).

No-one ineligible to collect should have to contribute.

Benefits should be inaccessible to anyone with less than two years continuous employment.  Premiums paid by anyone terminated with less than two years continuous employment should be refunded.  IOW, you won't get screwed (lose the premiums) if you can't get a proper full-time year-round job, but you won't collect unless you had a proper full-time year-round job.


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## ballz (7 Jan 2014)

I was unable to find the info I was looking for, so I went a much easier route and started looking at Income Insurance in the UK.

I've been quoted, based on my age and $60,000 per year working for the Gov't, a rate of $840/year which would give me 12 months continuous coverage of 50% of my earnings. I would receive first payment 31 days after becoming unemployed, but be backpaid to the first day of unemployment (so no time period without income).

Compared to the current EI program in Canada, where if I understand it correctly I'd only be eligible for 44% of my income for just over 10 months (45 weeks) after waiting one month for the first cheque. And yet I'm paying $891/year plus my employer is paying an additional 1247 for a total of $2138, and that's about to go up for 2014....


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## ballz (7 Jan 2014)

Brad Sallows said:
			
		

> I remain unconvinced that a select few categories of workers in certain regions of the country should be able to work less than a year to support themselves for a year, while others must work all year round.



There are seasonal jobs where you can make a year's wages (50,000 or more) in 20 weeks, but then turn around and collect EI for the other 35 weeks (so another 16,000 bucks). You really hit the nail on the head when you called it a "wage subsidy."


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## stealthylizard (7 Jan 2014)

I was one of those employed in a seasonal job for about 9 years.  Seismic exploration/surveying.  Most of the time, the work didn't exist year round, either due to weather (aka spring break-up, or snow to fall for the mountain work) or the uncertainty of the oil and gas market.  Lay-offs would start being offered when the work dried up in April/May.  I could sit at home and wait for the work to pick back up again somewhere between September and November.  I really didn't make enough money to support myself for a minimum of 4 months (it wasn't a very high paying job {$8.50/hr 90 hrs/week, 4-6 weeks on, 1 week off}, the overtime almost made it worthwhile), and maybe hope to find a job to quit again in 4 months, when work would pick back up again.  

Or I could collect the EI that I had been paying into, and look for a temporary job.  Where I was living, work was hard to come by, other than part time minimum wage jobs.  EI paid more than I would have made full time at a minimum wage job.  And anything I earned at a job while collecting EI would reduce the EI I was receiving.  If I made more than $200 gross/week, I would lose the full amount of EI for that week (approximately $350/week).

EI benefits are taxed, once when you get your money, and again during tax season, you claim them as taxable income.  Employers that have a regularly occurring record of lay-offs also pay a higher rate than other employers.

The program should remain in place, but changes need to be made.  Not once was I ever asked to provide a record of job searches.  The only employment that I had to search for was something comparable to the work I was doing prior to my lay-off, and at a comparable wage.  I did find other work, not because I had to, but because I was bored sitting at home 4-6 months every summer doing nothing but sitting by the phone hoping that the season would start early.  If you find another job but it's in a different locality, maybe they should help you with moving to the new area.  Make it mandatory to attend employment seeking seminars.  Have a "case worker" attached to your file, that can point you in the direction to more stable permanent work that's related to your previous employment.  Have a program set up with employers in areas with a lot of seasonal workers, and give them incentives to hire or build up your job related skill sets.


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## Edward Campbell (7 Jan 2014)

Brad Sallows said:
			
		

> To reiterate what I've written here before, EI is not properly insurance.  For some people (long-term employed who rarely are out of work) it functionally can be insurance.  Otherwise, it is chiefly a wage subsidy.  I remain unconvinced that a select few categories of workers in certain regions of the country should be able to work less than a year to support themselves for a year, while others must work all year round.  EI is, bluntly, capricious and unfair - something no government entitlement should be.  Economically, it reinforces failure and retards success.
> 
> The additional paid social leave entitlements that were grafted on in recent years were introduced because of the surplus funds sloshing around in the pot.  The genuine merits of what those programs deliver are irrelevant; they should have been funded out of general revenues if they are worthwhile and the government should have raised taxes accordingly.
> 
> ...



 :goodpost:

I am with Brad on this; I agree with him, point by point.


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## Infanteer (7 Jan 2014)

Yes, great post Brad.


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## Lightguns (7 Jan 2014)

I meant skidders in my past post. This auto correct on this iPhone is driving me to distraction.


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## Bruce Monkhouse (7 Jan 2014)

Brad Sallows said:
			
		

> No-one ineligible to collect should have to contribute.



Everyone agreeing with Brad's post are missing one thing, explain to me who that particular line above includes.


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## Edward Campbell (7 Jan 2014)

My understanding ~ and I cheerfully admit to knowing somewhat less that Sweet Fanny Adams about EI ~ is that when a person is entitled to an annuity of a certain amount, let's call it _$NN,NNN_ per year, one cannot claim EI when one leaves, say, a government job. Now some people reach that _$NN,NNN_ level several years before they reach their optimum (or required) retirement age. It seems to me that those people, folks who cannot claim EI when they leave their jobs, ought not to have to pay into it after they reach the _$NN,NNN_ threshold.


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## Bruce Monkhouse (7 Jan 2014)

Edward,
Of course it was you, my friend, that 'sniffed out' my trap.............


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## PPCLI Guy (7 Jan 2014)

And why I will never draw EI.


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## Bruce Monkhouse (7 Jan 2014)

PPCLI Guy said:
			
		

> And why I will never draw EI.



Yes, but until you reached Edwards 'magic' number you had no way of knowing that.  I also sure hope the pension you count on stays solvent........[which we know the Govt. will just rape the taxpayer furthur to fund if required but, once again, not all unfortunate souls are that lucky]


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## Infanteer (7 Jan 2014)

Bruce Monkhouse said:
			
		

> Edward,
> Of course it was you, my friend, that 'sniffed out' my trap.............



Your lucky Sweet Fanny Adams wasn't on these threads....


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## stealthylizard (8 Jan 2014)

At the end of my TOS, I was told to make sure I apply for EI right away if I expected any problems finding employment.


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