May 25, 2009 / 3:21 PM / 9 years ago

Canada widens job benefits; election threat lingers

OTTAWA (Reuters) - The Conservative government unveiled an expansion of jobless benefits on Monday but rejected demands from opposition parties to relax current eligibility rules or risk facing an election over the issue.

It was not immediately clear if the initiative would be enough to keep the Liberals from trying to defeat the Conservative government, which holds only a minority of seats in the House of Commons and must rely on the support of at least one of the three opposition parties to stay in power.

One Liberal official, who asked not to be identified, said the new benefits had already been flagged in the January federal budget and did nothing to address qualifying for Employment Insurance (EI).

Monday’s announcement, by Human Resources Minister Diane Finley, entailed C$500 million in EI spending to help laid-off workers with long tenure to upgrade their skills.

“Measures in our economic action plan demonstrate the government’s commitment to improving the EI program to help Canadians adjust to the changing economy,” Finley said in Oshawa, Ontario, where many autoworkers have been laid off following the closure of a General Motors Corp truck plant.

All three opposition parties have demanded the government allow workers across Canada to be eligible for Employment Insurance after working a standard 360 hours -- or 45 work days -- as the recession takes its toll. Liberal leader Michael Ignatieff has threatened a non-confidence vote over the issue.

Current rules require 420 to 700 hours of work to qualify, depending on the region of the country. The new government initiative did not alter that formula but would allow earlier access to EI benefits for workers using severance packages to invest in training.

At first, the Conservatives had suggested they were open to the lower uniform standard, by saying they were listening to all proposals, but they have subsequently come out swinging against it.

Finley issued a lengthy statement on the weekend saying the proposal would require higher EI premiums to pay for it, and this would be disastrous during a recession.

“Michael Ignatieff and the Liberal Party think that Canadians should be eligible to collect Employment Insurance after working only 45 days,” she said.

“This government does not support this ‘45-day work year’ idea and neither do Canadians.”

Liberal Member of Parliament Mike Savage told CBC television that premiums would not have to rise, since general tax revenues could be used.

“If more money was needed, it would come out of general revenues,” he said. The Conservatives have criticized this idea as violating the concept of the EI program as self-financing.

Ignatieff was scheduled to address the Conservative plan with reporters later on Monday.

The Conservatives won last October’s general election with strengthened numbers in the House, though still short of a majority.

The Liberals currently lead in opinion polls -- a new survey on Monday showed them far ahead in Quebec, the second most populous province -- but their national lead is so slim that most analysts believe they would be reluctant to risk a fresh election in the next few months.

If Ignatieff did want to force an election, he would need the support of both the other opposition parties. While they have each called for a 360-hour EI eligibility standard, they have not made clear whether they would support a non-confidence vote on the issue.

Editing by Rob Wilson

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