Albertans are getting hosed by the federal government’s Employment Insurance (EI) scheme.

Now, before you accuse the Canadian Taxpayers Federation of having an acute case of Let-the-Eastern-Bastards-Freeze-in-the-Dark Syndrome, understand that EI is hurting workers in the east more than anyone else. It’s a millstone on their economy and it exacerbates serious social ills that come with unemployment. But it is also costly and unfair to Albertans.

Workers need a safety net to ensure that when we are between jobs that we don’t fall between the cracks. Mortgage payments still need to be made and food put on the dinner table. But when many Albertans need to access the EI program that they’ve paid into, they are often denied. That is because the federal government rigs the program so that you have to work longer in some areas of the country before you can collect less money.

The result is that 100% of unemployed workers in Atlantic provinces receive EI benefits, but only about 58% of unemployed Albertans do.

Let’s use an example of two fictional workers. The first is Mike from Canmore, Alberta. The second is Danny from rural Newfoundland and Labrador. Both Mike and Danny worked in a factory for 32 hours a week. They both made $900 a week until after 14 weeks on the job, the factories reduced their hours to 12 hours a week, reducing their take-home pay to just $300. After another 12 weeks, the factories shut down and they were both laid off. Over this time, they each earned $16,200.

Danny from Newfoundland is entitled to benefits of $16,830. Mike from Canmore is entitled to nothing. Both men worked identical hours, in identical jobs, and contributed identical “premiums” to EI. Yet, one worker is entitled to more money than he paid in (or even earned!), and the other isn’t entitled to a single penny of his own contributions.

Between 2008 and 2010, in Canmore, only 10.3% of working age taxfilers reported EI income, compared to 89% in rural Newfoundland and Labrador.

And what about “frequent claims” – those who manage to work the minimum required hours to qualify and mysteriously find themselves unemployed and claiming EI, before starting the whole process over?

Danny from Newfoundland is over five times more likely to make frequent claims than Mike from Canmore. In Alberta, 7.6% of EI recipients are classified as “frequent claimants.” In Nova Scotia, it’s 42%. In Quebec it’s 35.7%, and in Newfoundland and Labrador it’s 62.4%.

Mike from Canmore is way less likely to be a frequent EI abuser, but he is the one that the federal government cuts off. Is that fair? To Mike? To Alberta? To workers across Canada who don’t abuse the system?

It’s not that Albertans are paying less into the program.

In fact, EI has paid out more than double the benefits in the Atlantic provinces relative to their contributions to the program. In Newfoundland and Labrador, EI has paid out 334% more than was collected. 

In Alberta by contrast, we receive just 59% of what we’ve paid into the program. If your investment banker was earning these kinds of returns for you, you’d fire them.

Maybe we could forgive the program’s defects if the generosity of Alberta’s working men and women was helping those in poorer provinces get on their feet, but it’s not. While Newfoundland has an unemployment rate of 13.2%, companies like Vale have to bring in temporary foreign workers to fill jobs. Government has made not working too profitable in some parts of Canada.

Let’s not beat up on Newfoundland or Quebec for this. Albertans would be just as likely to abuse a program that is designed to be abused. 

It’s not time to reform EI. It’s time to throw it in the trash and build a new program that respects hardworking, taxpaying men and women. 

To read the CTF’s recent report on EI click here: http://taxpayer.com/news-releases/ctf-calls-on-ottawa-to-let-canadians-save-their-ei-contributions