Its intellectual hull is ruptured and spewing economic waste. Some of the waste is evident. Nobody will have a seizure if I mention that EI creates unemployment by encouraging seasonal workers to work short spans. Street riots will not break out if I state that EI milks the Western provinces in order to suckle the eternally immature economies of the provinces east of Ontario. But I think heads would rise if I said that government EI is a poison that kills innovation in the private market for employment insurance.
Institutional memories are short.
In the 19th century, workers' guilds and friendly societies in the UK put money into a common pool to protect their members from unemployment. Just before World War I, such private UI plans covered about 25 percent of the UK labour force. Before World War II, some private companies in the US insured their workers against unemployment. Once governments took control of UI, the demand for private sector unemployment insurance dropped out of sight. The Canadian government's massive spending on EI ensures an enormous blackout in the minds of financial experts.