It all seems so straightforward and evident: why not cover vulnerable “gig” workers, an often-marginalized group in the economy, who were hit so hard by the pandemic, under EI? In June, a parliamentary committee recommended that Employment and Social Development Canada conduct consultations on ways to provide self-employed persons, including those in the gig economy, with access to regular Employment Insurance benefits. ESDC has responded and formal consultations along these lines are forthcoming. They need to include a sober, detailed analysis of the problems involved.
The first item on the agenda ought to be a clear and agreed definition of gig work, which is critical to insuring potential income losses. A recent survey by the Canadian Labour Market Information Council documented “a wide range of specific, sometimes inconsistent approaches to discussing, measuring and defining gig work.” Fortunately, Statistics Canada is working on a coherent framework for collecting information on gig employment. That should help the development of sound policy measures to assist gig workers. For the time being, it’s useful to think of gig work in terms of the “four no’s”: no wage or salary; no stability of the employment relationship; no fixed work schedule; and no predictable earnings.
The second point consultations likely will focus on is the possibility of integrating gig workers into the standard, regular-benefit EI regime along the lines of the “Special Benefits for Self-employed Workers” introduced in 2010. That program involves voluntary participation on the part of workers, with no employer contribution, which is instead provided by the government. Approximately ten other OECD countries have created regimes designed for self-employed workers (not all of whom are gig workers). As in this country, however, they tend to have very low take-up rates, offer skimpy benefits, complement subsidies from other government sources, and end up being essentially shell programs. If participation were made mandatory, one could expect resistance in the form of gig positions going underground or disappearing altogether.
A third possibility the consultations should consider — and reject — is a special, separate, “boutique” EI regime for selected gig workers, along the lines of the existing EI regime for fishers. An infamous case study is France’s long-standing EI regime, “ les intermittents de spectacle ,” which is restricted to workers in the performing arts. It has proven both fiscally and administratively costly and has led to long-term dependence on the part of workers. It also generates obvious inequities in coverage compared to what is available to other non-standard workers who do not have access to its benefits.
As I argue in a recent C.D. Howe Institute report, other reasonable policy responses to this challenge do not involve EI. First, gig workers seeking to transition to more stable employment can obtain retraining benefits and employment assistance through existing provincial workforce development agreements. To complement such assistance, we could create a Temporary Unemployment Assistance (TUA) provision, which was suggested and outlined a decade ago by an EI task force but never implemented. It would provide income assistance in the form of a loan for the non-hardcore unemployed who cannot access EI but need aid to survive financially or to get training and rejoin the workforce. The federal Conservatives’ 2021 election platform included a similar measure involving flexible, portable employee savings accounts – separate from the EI regime – that beneficiaries could spend as they pleased.
One part of the policy mix we should definitely not jettison is the status quo of self-insurance: we should encourage gig workers, like everyone else, to save on their own for a rainy day. The limited statistics that do exist suggest that many people doing gig work do not make a career choice of it. For those who prefer its flexibility and have the required skill sets, potential policy interventions that in the end reduced opportunities for gig work or taxed it more might involve greater costs than benefits. Not all gig workers will want EI coverage. And the current almost unprecedented level of vacancies for more standard positions will provide at least some gig workers the security they evidently desire.
David Gray is an Economist at the University of Ottawa.