Thursday, September 28, 2000
National Post

EI makes fishing worthwhile

By Peter Fenwick

The 1996 changes to the Employment Insurance system were supposed to encourage seasonal workers to work more and draw less from the EI fund. For fishermen, at least, that hasn’t happened. Instead of discouraging people from becoming seasonal fishermen, the system has increased the number of fishermen over the two years since the reforms were implemented.

The reforms expected to be tabled in the House of Commons tomorrow will restore benefits to highly paid seasonal workers and will increase benefits for other seasonal workers — ill-advised reforms at best. But the most critical reform is the need to plug the hole in the system that is swelling the ranks of fish harvesters at a time when fish stocks have yet to recover.

This increase in the number of fishermen is happening despite expensive programs of licence buybacks, early retirement, and wage subsidies that were supposed to reduce the number of fishermen. It is as if one department of government, Human Resource Development Canada, is not listening to the Department of Fisheries and Oceans. That increased effort will also threaten the long-term viability of the fish stocks that are only now slowly recovering.

The underlying cause of this growing catastrophe is the apparently innocent change in the way in which fishermen qualify for their EI payments. Prior to 1996, fishermen needed to work for at least 12 weeks and had to earn a minimum amount to qualify for unemployment insurance. But in 1996 the basis changed from weeks worked to sales alone. Net sales of as little as $2,500 worth of fish were enough to qualify a fisherman for a half year of benefits.

The cash-based system became an easy method for many people to qualify for Employment Insurance, especially at a time when shellfish landings were exploding. In the past four years, the Atlantic quota for shrimp rose from less than 20,000 tonnes to more than 100,000 tonnes, much of which was allocated to the inshore fleet, where family enterprises could catch it. The same thing happened to crab quotas. Many crab boats caught several hundred thousand dollars worth of shrimp annually, and many skippers and crew members qualified for EI benefits on the first day of the season.

True, the fishermen suffered cuts in benefits with the reforms, but with the cuts came some significant benefits. The family supplement was improved in 1996. It assures low-income fishermen with dependent children of 30% higher benefits.

The result of these reforms is two steps forward and three steps back. The last few years have seen a surge in fish harvesters’ EI claims. Even officials at HRDC are admitting failure. In their 1999 report, they reluctantly concede the new cash-based system is increasing the number of fishermen in the industry at the same time DFO is paying hundreds of millions of dollars to reduce the number of fish harvesters. Overall, $350-million has been either spent or budgeted to reduce the number of fish harvesters.

It is not hard to see why young rural Canadians want to become fishermen. For new entrants to the fishery, a net income of $5,000 is all that is needed to qualify. That can be caught in a few good sets of a herring net, while new entrants to regular EI have to put in a full 26 weeks of work before they can qualify. Once a fisherman qualifies for EI, he receives significantly higher benefits than other seasonal workers for a much longer period of time.

In addition to the $350-million licence buy-out program, fishermen received wage subsidies to make a fresh start in other industries. But all that spending was wasted when more than 3,200 new entrants claimed fishermen’s EI for the first time in 1998. And while these new entrants were already nullifying the fisheries buy back program, another 5,700 occasional fisheries claimants (fewer than three claims in the last five years) re-entered the fishery. In total the easy availability of fisheries EI benefits contributed to many more people entering the fishery than were bought out during the moratorium.

Part of this influx back into the fishery was due to the end of the TAGS program. The $1.9-billion program supported tens of thousands of fishermen while they waited for fish stocks to recover. The TAGS fishermen are re-entering the fishery after crab and shrimp. But at least 2,000 of the fishermen making new EI claims were under the age of 25 in 1998. They are young adults who would not have been able to qualify for any benefits under the TAGS program. They are taking up fishing for the first time.

The income-based EI system has drawn young people into an already crowded industry at a time when they should be encouraged to choose occupations with a greater future. Already anecdotal stories are circulating about high schools students who fished on their relatives’ shrimp or crab boat during the summer and then dropped out of school to qualify for benefits.

The old 12-week system may have been open to abuse, but it had the virtue of preventing high school students from fishing during their summer holidays and then ruining their lives for a temporary benefit. To claim benefits, high school students must be available for work, and not in school full time.

Unless the income-based EI for fishermen is changed and changed soon, the number of fishermen, and the fishing effort on fragile stocks, will grow despite the hundreds of millions being spent to do otherwise.

That is the problem the federal government should be fixing.