The Métropolitain

Agnès Maltais’ aborted pilgrimage to Ottawa

By William Johnson on March 13, 2013


Was it symbolic? Quebec’s labour minister Agnès Maltais took a plane to the national capital Monday but was unable to land. The airport tarmac was covered with freezing rain making a landing dangerous.

The Quebec minister flew to confront Diane Finley, the federal Minister of Human Resources and Skills Development. Maltais insists that Ottawa doesn’t understand Quebec’s labour market. She came intending to set Finley straight and insist that the reformed program for employment insurance that went into effect in January be rewritten to suit Quebec. In fact, the policy of the Quebec government is to demand the total transfer of employment insurance to Quebec, as part of “la gouvernancesouverainiste.”

Fat chance of that. But a compromise can be worked out. Constitutionally, Ottawa has jurisdiction over employment insurance while Quebec controls social welfare. The present federal program of employment insurance, even with the timid reforms that took effect January 1,contains a huge element that is not really insurance at all, but truly welfare. That could be separated out and transferred to Quebec.

Ottawa doesn’t understand Quebec’s labour market, with its widespread seasonal unemployment in the regions? Wrong. There’s no secret there. Unemployment was scrutinized minutely in the 1980s by three commissions of enquiry that made sensible recommendations on how to alleviate it. The trouble is, no government dared implement them.

william_johnson.jpgIn 1982, when Canada’s economy had just suffered a deep recession and was threatened by U.S. protectionism, Pierre Trudeau appointed the Royal Commission on the Economic Union and Development Prospects for Canada, headed by his former finance minister Donald Macdonald. This was the commission that, in 1985, recommended a “leap of faith” into a free trade agreement with the United States. It gave cover to Brian Mulroney, previously opposed to free trade, to conclude an agreement with Ronald Reagan.

But the commission had another important recommendation for structural change – one that Mulroney declined. Its report praised the good intentions that had inspired the vast expansion of the unemployment insurance system in 1970, but pointed out that it had perverse effects by covering people whose employment was seasonal, for example, in the fisheries, the forest industry and tourism. The UI system encouraged regions with high seasonal unemployment – Quebec and the Atlantic provinces – to retain temporary, low-paying jobs which were then subsidized by transfers from workers and companies in the rest of Canada. The programs promoted under-development in the five eastern provinces and drained money from the others.

Unemployment insurance, as really insurance, was supposed toprotect against unexpected loss of employment, the commission argued; but not against the wholly predictable unemployment of the seasonally employed, holding temporary jobs: that was in reality welfare. So the Macdonald commission urged separating the two functions of insurance and welfare, and using the money saved by reduced insurance costs to target welfare recipients, and perhaps even to establish a guaranteed annual income.

Brian Mulroney appointed his own Commission of Enquiry on Unemployment Insurance, headed by Claude Forget, who had served as Quebec’s minister of health and welfare under Robert Bourassa. Forget traveled the country, holding public hearings in 46 different locations. In its report, the commission urged that “fundamental transformation” of unemployment insurance was “essential.” Like Macdonald, Forget found the existing unemployment insurance system had important perverse effects on both the regions and the individuals engaged in seasonal industries, and recommended separating the functions of insurance and welfare.

In Newfoundland, where seasonal work was especially rampant, Brian Peckford launched the 1985 Royal Commission on Employment and Unemployment, headed by Memorial University sociologist Douglas House. Its report was titled Building on Our Strengths and was summarized as follows: “The commission argued that the status quo undermined the intrinsic value of work, good work habits and discipline, the importance of education, personal and community initiatives, and the incentive to work. It also discouraged self-employment and small-scale enterprise.”

Maltais and Pauline Marois should demand an end to federal intrusion into provincial jurisdiction Ottawa’s subsidizing seasonal workers. Let Quebec reclaim that welfare function. ThenMarois can boast of a notable victory in her campaign for la gouvernancesouverainiste.