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Cablegate: Canada: Conservatives Aid Jobless, Buy Time

VZCZCXRO0877
OO RUEHGA RUEHQU RUEHVC
DE RUEHOT #0870/01 3102123
ZNR UUUUU ZZH
O 062121Z NOV 09
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0061
INFO ALL CANADIAN POSTS COLLECTIVE IMMEDIATE

UNCLAS SECTION 01 OF 02 OTTAWA 000870

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON CA
SUBJECT: CANADA: CONSERVATIVES AID JOBLESS, BUY TIME

REF: OTTAWA 719

OTTAWA 00000870 001.2 OF 002


1. (SBU) Summary: On November 5, the federal Conservatives
unexpectedly secured swift final passage of Employment Insurance
(E.I.) legislation to extend jobless benefits. The achievement is
the key deliverable for the left-of-center New Democratic Party
(NDP), which stepped in to prop up the minority government after
the Liberals abruptly withdrew their support in September (reftel).
Separately, the government is fast-tracking companion E.I.
legislation (C-56) to extend maternity and special benefits to the
self-employed, as well as pushing a fiscal stimulus bill through
the House of Commons. The economic package should be enough to
keep NDP support into 2010, buying the government time to craft a
spring budget. End summary

PHASE I: HELP LONG-TENURED WORKERS

2. (U) The federal government introduced C-50, an E.I. reform
bill, on September 16, two days after the House of Commons resumed
from its summer recess. Bill C-50 extends the benefit period of
regular Employment Insurance (E.I.) payments by up to 20 weeks to
unemployed long-tenured workers who had paid premiums to the
program for a significant period of time, but had previously made
limited or no use of the program. The government estimated the
bill will help 190,000 eligible claimants.

3. (U) Human Resources Minister Diane Finley emphasized that the
time-limited measure was "fair" and "the right thing to do," but
also financially prudent as the government "continues to make
responsible choices... to meet current needs" without incurring
ongoing structural obligations. The Bill extends benefits on a
temporary basis until fall 2011. The benefits are in addition to
measures in the government's Economic Action Plan announced in the
January federal budget which extended an extra five weeks of
regular Employment Insurance benefits (E.I.) to all insured
workers, increased the benefit period to 50 weeks in regions of
high unemployment, and provided additional support for transitional
skills training.

A LIBERAL "CHANGE OF HEART"

4. (U) With NDP support, the government passed Bill C-50 after 48
days in the House of Commons. Both the Liberals and Bloc Quebecois
opposed it on the grounds that it offered too little aid to the
jobless. The Bill moved to the Senate or upper house on November
4. Observers had expected the Liberal majority in the unelected
Senate to delay or amend it, but the Senate expedited the Bill and
passed it without amendment on November 5. Liberal Senator Joseph
Day, the Chair of the Senate National Finance Committee, attributed
the quick turn-around to the Committee's "pre-study" of the Bill
before it arrived in the Senate. However, he also acknowledged a
delay would have elicited "the typical argument that we are not
sensitive to the plight of the unemployed."

PHASE II: AID FOR THE SELF-EMPLOYED

5. (U) As Phase II of proposed E.I. reform, the government
introduced Bill C-56, Fairness for the Unemployed Act, on November
3 to allow self-employed workers to opt into the E.I. plan on a
voluntary basis to access maternity, parental leave, sickness, and
compassionate care leave. The Bill, which Minister Finley
described as "good family policy," fulfills a 2008 Conservative
election pledge. The government appears to be fast-tracking the
measure which all the opposition parties allowed to pass to
committee on November 5 without a recorded vote. Similarly, the
government has pushed passage of Bill C-51, the Economic Recovery
Act, to implement a popular home renovation tax credit, first-time
home buyers' credit, and other fiscal stimulus measures left over
from the January federal budget. The Government House Leader
confirmed November 5 that the government wants to complete all
stages of the Bill in the Commons by November 6.

OTTAWA 00000870 002.2 OF 002


6. (SBU) Conservative Party contacts told PolMinCouns that the
Liberals had had a "change of heart" over Bill C-50, reflecting
their inability to obtain any traction in the polls. Conservative
contacts believed that their second E.I. bill and the fiscal
stimulus bill would be enough to keep NDP support into 2010 and
give the government time to craft a spring budget before the next
election.

COMMENT

7. (SBU) The surprisingly swift passage of C-50 reflects the
tortuous line the Liberals have drawn for themselves in reflexively
opposing the Conservative minority government while seeking to
maintain advocacy for the unemployed. The NDP won a tangible
reward for its support and has an incentive to hold on for more.
The Conservatives have given little away, but have responded
quickly to public anxiety over premature exhaustion of jobless
benefits, while reinforcing key messages in their Economic Action
Plan. In so doing, the Tories have also moved methodically to
dismantle opposition arguments in favor of an election.
JACOBSON

© Scoop Media

 
 
 
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