Origins of fisherman’s unemployment insurance in Canada, 1935-1957

Benefiting fishermen: Origins of fisherman’s unemployment insurance in Canada, 1935-1957

William E Schrank

The fishermen’s unemployment insurance system in Canada must be one of the most controversial aspects of this most controversial of industries. This paper describes the debates concerning the desirability of extending the unemployment insurance system to fishermen, from the original parliamentary debate on unemployment insurance in 1935, through the enactment of the enabling legislation in 1956, to the implementation of fishermen’s unemployment insurance in April 1957. The main question asked, and answered, is why a money transfer system that was opposed by the government agencies that would be most involved in its administration (the Department of Fisheries and the Unemployment Insurance Commission) was implemented.

Le systeme canadien d’assurance chomage des pecheurs est sans doute l’aspect le plus controverse de cette industrie deja fortement :ontroversee. Cette etude examine les debats portant sur l’idee d’entendre le systeme d’assurance chomage aux pecheurs, depuis les discussions parlementaires sur l’assurance chomage en 1935, en passant par la promulgation de la legislation d’habilitation en 1956, jusq’ a la mise sur pied de l’assurance chomage des pecheurs en avril 1957. On cherche a savoir pourquoi un systeme de transfert monetaire: fut mis en place alors que les principales agences gouvernementales en charge de 1′ appliquer (les dep’tements du travail et des pecheries, et la Commission d’ assurance chomage) y etaient unanimement opposees.

In his Memoir, Jack Pickersgill describes how, after resigning his position as secretary to the Canadian Cabinet in 1953, he successfully campaigned for election to Canada’s House of Commons as Liberal candidate for the Newfoundland district of Bonavista-Twillingate.1 He tells of meeting a fisherman in the outport of Herring Neck who “pointed across to the local fish merchant’s premises and asked me why the men who worked there had unemployment insurance and the fishermen who provided the work did not.” Pickersgill explained that fishermen were not wage earners, but independent operators and therefore were disqualified from receiving unemployment insurance (394). He found himself dissatisfied with his answer, and quickly was converted into an advocate for the extension of the unemployment insurance system to fishermen. Whether his advocacy arose from a belief that an injustice was being done to fishermen, or from an appreciation that supporting unemployment insurance for fishermen would be a popular position for a Newfoundland politician to take, or a combination of both, is not particularly germane to this paper. What matters is that after a long struggle that required “overcoming the stubborn resistance of the bureaucracy in the Unemployment Insurance Commission” (418), the desired legislation was enacted, becoming effective 1 April 1957. Indeed, Pickersgill regarded his part in securing unemployment insurance for fishermen as his most substantial contribution to the welfare of his constituents (420).

From the time when unemployment insurance was first debated in Canada’s House of Commons during the Great Depression of the 1930s, it was the government’s intention to exclude fishermen from coverage. The Unemployment Insurance Act became law in 1940 with fishermen excluded. A long struggle ensued, with fishermen and their allies promoting the extension of coverage against the determined opposition of officials in the Department of Fisheries and the Unemployment Insurance Commission.2 Finally, in 1957, the programme was extended to fishermen. Since then, virtually every policy review of unemployment insurance has condemned the fishermen’s system, usually calling for the withdrawal of coverage from fishermen. Yet the economic and political exigencies of fishing communities, particularly in Newfoundland but throughout Canada’s Atlantic and Pacific provinces, have ensured that once in place, the system could not be dismantled.

This paper discusses the debates that led to the extension of the unemployment insurance system to fishermen. In Section II, a brief historical and theoretical overview concerning Canada’s unemployment insurance system is presented. Section In reviews the debate from the parliamentary session of early 1935 when Canada’s first unemployment insurance bill was introduced until Pickersgill’s election from Newfoundland in 1953. In Section IV, the debate is continued from 1953 until the last ditch attempt in 1956 by the Department of Fisheries to stop fishermen from receiving unemployment insurance coverage. Section v continues the story from Cabinet approval in August 1956 through April 1957, when fishermen finally came under the unemployment insurance umbrella. Section IV presents conclusions.

Historical and Theoretical Background

The first compulsory national government unemployment insurance system was put into place in Britain in 19113 under the leadership of the Secretary of State for the Home Department, Winston Churchill. In a major speech to the House of Commons on 25 May 1911,4 Churchill laid out the premises of his proposed scheme, premises which to a great extent carried over into the Canadian discussions of the next 30 years.

Churchill made it clear that, while there was room for future expansion, the government was initially introducing a scheme of unemployment insurance of limited, rather than universal, scope. The covered industries were the “main trades concerned with producing the instruments of production” (497), industries subject to nearly complete collapse during periods of economic depression. Those covered “[are] not decaying trades, they are not overstocked trades, they are not congested with a surplus … supply of labour, but they are trades whose employment is due not to a permanent contraction but to a temporary oscillation…” (497). In higher paying, more highly unionized, trades such as coal mining and textiles, wage spreading or short time could be used to distribute the burden of unemployment. In the trades covered by the 1911 legislation, the drop in economic activity was so extreme that such devices to ease deprivation were unavailable.

Another important aspect of the scheme was that it was so constructed that disincentives to working were minimized. The benefits were so low that, as Churchill put it, “no workman in his sense would ever exchange the regular reward of wage payments for what are, after all, very narrowly grants which alone will be payable under this scheme” (502).

By 1913 there were calls for Canada to follow Britain in adopting an unemployment insurance system. During the First World War there was interest in unemployment insurance as a device to ease the conversion of a war economy to peacetime by minimizing the negative effects of the anticipated unemployment of returning soldiers. Canada’s Liberal Party included a call for unemployment insurance in its 1919 party convention platform. That same year Canada favoured unemployment insurance at an international labour conference. By the end of 1920, however, the momentum propelling Canada towards adoption of unemployment insurance had dissipated as a result of political changes within the ruling Conservative Party, the after-effects of the Winnipeg General Strike of the previous year and the generally deteriorating economic situation.

The Great Depression saw a resurgence of interest, with Prime Minister R.B. Bennett in 1935 introducing unemployment insurance legislation into the House of Commons. Consistent with the original British plan, coverage was limited, with seasonal workers (including fishermen) excluded as outside the insurance (“actuarial”) ambit. Also consistent with Churchill’s plan, to prevent malingering the benefit rate was fixed at less than the lowest unskilled wage rate.

Although in 1920 the Department of Justice had ruled that unemployment insurance fell under federal jurisdiction, by 1928 the department had reversed itself, believing that a compulsory unemployment insurance plan would fall under provincialjurisdiction. Bennett wavered, but by the time he had introduced the bill in 1935 he had returned to Justice’s 1920 position. The Employment and Social Insurance Act was passed in 1935, followed by a federal election in which the Conservative Bennett government was defeated by Mackenzie King’s Liberals. King immediately submitted the Act to the courts for a decision regarding jurisdiction. The decision was returned in 1937 in favour of the provinces. King then moved for a constitutional amendment which, after much manceuvring, was approved by the British parliament in July 1940. An unemployment insurance act slightly revised from that of 1935 was passed in Canada the next month for implementation the following year.’

Pal presents a useful categorization of theories that have been advanced to explain the events leading to the implementation of unemployment insurance in Canada. On the one hand are neo-Marxists with society-centred theories in which policy depends primarily on economic interest groups. This class of theories is further broken down into a number of sub-theories, the primary of which for our purposes are the instrumentalist (where as a result of formal and informal ties between business and the state, the interests of the capitalist class are implemented by the state) and the structuralist (where the links between state and class are weaker, policy being driven by class conflict that results in the state having a considerable degree of “relative autonomy” from the capitalist class).6 On the other hand are two statecentred theories: the bureaucratic (which focusses on the internal workings of the state and in particular on conflicts among bureaucrats jockeying for power and prestige) and the institutional (wherein institutional features of the state are critically important). In Canada the primary institutional feature is “federalism,” concerned with the division of powers between the federal government and the provinces.7

The views of Cuneo, Pal and Struthers are conveniently summarized by McBride.8 For Pal the constitutional problem was a genuine cause of the delay in implementing unemployment insurance while for Struthers it was merely a pretext. In Pal’s view, the bureaucrats’ adoption of the actuarial ideology, whereby the plan must be self-financing (receiving no extraordinary government aid), was adopted with little concern for class interests. The classes were too divided and the bureaucrats too powerful for the society-centred theories to have much validity. Cuneo, in contrast, favours the neo-Marxist structuralist approach. The two World Wars and fears that social disturbance would follow the Second World War pushed aside the dominance of the capitalist class. Cuneo quotes as illustrative a parliamentary speech by A.W. Neill (Independent MP for Comox-Alberni, British Columbia) who, during the 1940 debates, condemned the Chamber of Commerce for its opposition to unemployment insurance: “Cheap, short-sighted, ostrichheaded! Do they want bloody revolution after the war? Think of all those idle men who will come back. They will not stand for the situation that prevailed the last time (after the First World War).”9 The state gained a measure of “relative autonomy” to satisfy its own needs regardless of class interests.

Struthers stresses the agrarian nature of Canada’s economy, citing arguments made in the 1920s against unemployment insurance on the grounds that less financial support for the unemployed would force city folk, appropriately, to return to the farms. The increasing cost of relief to local governments during the 1930s, together with a fear that social unrest would follow the Second World War, however, finally led to the adoption of a national system of unemployment insurance. Interestingly enough, Struthers notes that Pickersgill, as early as 1938, argued in favor of unemployment insurance as a strong engine of Canadian national unity.’o

McBride’s view, focussed on events that began in the 1970s, is that changes in unemployment insurance policy are attributable to shifts in political ideology – in broad strokes, the shift from the Keynesian to the monetarist paradigm. While there is much of value in McBride’s perspective, Pal offers the criticism that since “Canada’s commitment to Keynesianism was questionable to begin with … the degree of paradigm shift may have been small.”” Whether or not McBride’s paradigm shift approach is valid for analyzing major influences on unemployment insurance policy, either in the 1930s or more recently, it seems unlikely to explain the granting of unemployment insurance coverage to fishermen.

The theories described in the works of Cuneo, Pal and Struthers are intended to explain the evolution of unemployment insurance in Canada from conception to legislation. The concern of this paper is much narrower: the battles waged over the question of whether one occupational group, fishermen, should be included in the unemployment insurance system. What, then, is the relevance, if any, of these theories to the incorporation in 1956/57 of fishermen into the unemployment insurance system originally implemented 16 years earlier?

Consistent with Churchill’s concept of limited applicability, the 1940 Unemployment Insurance Act covered only about 42 per cent of Canada’s workforce.12 But just as Briltain’s coverage was broadly expanded in 1920,’3 Canada’s coverage also expanded, but gradually. As early as 1943, coverage was extended to employees of municipally operated utilities and non-permanent employees of the federal government, with voluntary coverage granted to employees of hospitals and charitable institutions. The following year coverage was extended to lumbering, logging, some agricultural employment, hospitals, charitable institutions, some professional nurses, some municipal employees and Canadian civil servants. Coverage was gradually expanded to include seasonal water transportation workers, then to seasonal stevedoring. By the end of the 1940s coverage had risen to about 50 per cent of the labour force. Coverage continued to be expanded – to some horticulture workers in 1953, to some agricultural workers, additional horticultural workers and certain others in 1955. Fishermen, the subject of this paper, were covered as of 1957. By 1968, 80 per cent of the paid labour force (excluding the selfemployed) was covered. Coverage of this class of employees was made virtually universal (96 per cent) under the new 1971 Unemployment Insurance Act.'”

The easiest explanation for the inclusion of fishermen in the unemployment insurance scheme is that coverage was constantly being expanded and at some suitable time fishermen were included. It will be clear in what follows that fishermen were different, were perceived by the participants in the debate to be different, and that the causes of their inclusion in the system and the events that led to it were different. While it is beyond the scope of this paper to consider the debates surrounding expansion of coverage to other occupational groups, it is improbable that the treatment of fishermen was anything but unique.

Whatever the significance of the neo-Marxist models in explaining the debates about the adoption of Canada’s unemployment insurance programme during the 1930s, it is difficult to see them as particularly helpful in explaining the much smaller issue of the incorporation of fishermen into the system. Given that the unemployment insurance programme already existed, and that it was being gradually expanded to new occupational groups, why would class issues dominate the narrow question of extending the system to fishermen? It seems unlikely that they would. Except for the fishermen themselves, and their representatives, no one wanted to see them included in the system. The Canadian labour movement, with the exception of fishermen’s unions, took no part in the debates discussed below. When, a few years after fishermen had been incorporated into the plan, the Canadian Labour Congress filed a brief on the subject, it requested that fishermen be removed from unemployment insurance coverage and be supported by alternative means.’5 The society-centred models do not seem particularly helpful in this context.

Pal elaborates on the bureaucratic model by emphasizing the nature of bureaucratic politics.’6 In this model, bureaucrats subordinate organizational interests to their desires for power, income, prestige and security, all supported by the search for ever-larger empires. The dominance of the “actuarial ideology” is seen as a victory for the bureaucrats. Yet, according to Pal, they do not always succeed. Failures are noted when changes in the system are made that violate the actuarial principle. Pal cites the introduction of supplementary benefits (1950) and fishermen’s benefits (1956/57) as two examples. It will be seen that the bureaucrats vigorously fought against fishermen’s unemployment insurance. Rather than seeking to encompass some form of fishermen’s benefits under their wing, the officials of the Department of Fisheries and the Unemployment Insurance Commission fought to avoid instituting the system for fishermen. When it became clear that fishermen were to be included in the unemployment insurance system, the Unemployment Insurance Commission balked until literally the last minute, trying to palm the fishermen off onto some other government agency, or into an alternative system. Selfaggrandizement, the sine qua non of the bureaucratic model, does not explain the expansion of the unemployment insurance system to fishermen.

Pal’s second state-centred theory, at least in the context of federal/provincial relations, also lacks relevance to this narrative. The jurisdictional dispute was resolved by the time of the 1940 Act. While it is true that pressure for including fishermen in the system increased dramatically after Newfoundland entered Canada, the second smallest province did not in itself have the power to influence Ottawa on this matter. Through the intervention of Pickersgill, however, the balance of forces shifted. Although Pal notes that “it is now widely accepted that political parties and legislatures have relatively minor effect on policy outcomes,” (10), in fact, in this instance, it was the juxtaposition of an influential member of parliament with the Liberal Party’s desire to increase its electoral strength that settled the issue of fishermen’s unemployment insurance. Thus it is a neglected aspect”7 of Pal’s state-centred institutional model, the role of the political party, that provides the best explanation of the extension of unemployment insurance to fishermen.

The Early Debates

During the House of Commons debates18 that ultimately led to the adoption of Canada’s first Unemployment Insurance Act in 1940, there was discussion of whether fishermen would be included in the scheme. In the draft 1935 legislation, consistent with Churchill’s approach, there appeared a list of “excepted employments” the second of which was “employment in fishing,” and this exclusion continued unchanged into the Act as well as into its 1955 revision.’9

The fundamental concept underlying the original unemployment insurance bill was that only workers with a “contract of service” with their employer would be eligible for insurance. Prime Minister R.B. Bennett, in introducing the draft legislation, stated that some 10,000 fishermen would be excluded from the system because of the fishermen’s exemption.20 A number of MPs entered the discussion, arguing either that fishermen were laborers who should come under the Act, or that since most fishermen owned their boats and gear it would be “difficult to regard them as out of work employees” and therefore they should be excluded. The question of whether they were workers or businessmen remained central until fishermen were finally included in the scheme more than 20 years later. A second argument supporting inclusion was that the fishing industry needed “particular care” because it was seriously affected by the economic depression.21 That the fishery is so depressed an industry that it requires special attention continues to influence all policy considerations regarding fishermen’s unemployment insurance.

Once the unemployment insurance system was put in place in 1941, it took only a few post-war years :For agitation to build up on behalf of fishermen. Then, in 1949, possibly in response to Newfoundland entering Confederation, the Unemployment Insurance Commission initiated a cross-Canada survey to see whether it would be possible to insure all or part of the fishing industry. The conclusion drawn in the resulting 82-page report 22 was that it would be inappropriate to include fishermen in the unemployment insurance system, primarily because only seven per cent of Canada’s 88,000 23 fishermen were in a “contract of service” relationship with any employer, and therefore could be considered wage earners. An additional difficulty lay in defining “unemployment” for fishermen (who would almost never be unemployed during the fishing season and who could not work as fishermen during the off-season). Reviving the “fairness” argument of 1935, the report noted that to apply the system only to the seven per cent of fishermen who were employees in the usual sense would result in gross anomalies since some people doing identical work would be covered and some would not. The report concluded that if it were necessary to augment the income of fishermen, then government should devise a suitable income supplementation plan that would not distort the insurance role of the unemployment insurance system (82). As will be seen, the search for an alternative system to unemployment insurance started in 1951 and ran through all future discussions. The searches have always failed.

The Early 1950s: The Pressure Builds

Fishermen were constantly protesting that they should be included in the unemployment insurance programme. While the Unemployment Insurance Commission was preparing the report in which they opposed extending unemployment insurance to fishermen, the United Fishermen and Allied Workers Union of British Columbia, at its annual convention in 1950, passed a resolution expressing a very different opinion: first, that fishermen needed unemployment insurance (“Whereas: During the past winter instances have been reported of fishermen and their families without food or fuel in their homes ..”); second, that the omission of fishermen from the protection of the Unemployment Insurance Act was discriminatory; third, that the system should be extended with the first purchaser of fish playing the role of employer (as was in fact done when the system was finally extended seven years later).24

These arguments neatly draw the line between advocates and opponents of fishermen’s unemployment insurance. The former were interested in obtaining federal transfer payments for needy fishermen and believed that the unemployment insurance system could be modified to accommodate the peculiarities of the industry, while the latter believed that the integrity of unemployment insurance as an insurance system should be maintained, with alternative means found to subsidize fishermen. In any case, it is doubtful that the insurance aspect of the entire unemployment insurance system could have been rigorously maintained from this time since unfunded supplementary benefits were about to be introduced.25 None the less, the wholesale application of unemployment insurance to fishermen would clearly have undermined the insurance principle.26

The possibility of extending unemployment insurance to fishermen was continually reviewed by government. As early as October 1951, the Fisheries Development Committee (a joint Canada/Newfoundland agency established in 1951) discussed such an extension. They noted that this had been a sensitive issue ever since other workers in Newfoundland came under the scheme after Confederation.2 In June 1952, H.S. Gordon, who was destined to become one of the founders of modern fisheries economics, was asked to investigate the possibility of an alternative to unemployment insurance.” Nothing came of this initiative. The Department of Fisheries was already opposed to unemployment insurance being applied in its bailiwick. In the report of the Fisheries Development Committee (the “Walsh report”), the committee agreed that it was anomalous for fish plant workers to be covered by the unemployment insurance scheme while fishermen were not, but it nevertheless recommended that the exemption of fishing employment from the scheme should be continued.29 No alternative income supplementation plan was mentioned.

During the discussion that followed the publication of the Walsh Report, the Fisheries Industrial Development Branch of the federal Department of Fisheries noted that the number of fishermen in Newfoundland had been falling as new employment opportunities became available. It further noted that underlying the provincial government’s reaction to the Walsh report and the report itself “is a reluctance to consider the further loss of fishing population.” At the other end of the spectrum was the view of the branch that “a substantial withdrawal of men from the fisheries in Newfoundland is clearly necessary if the productivity of the individual is to be raised.”” The federal and provincial governments were clearly at odds on this issue, with implications for the fishery far beyond the narrow focus of unemployment insurance considered here.

Throughout the early 1950s, then, the political balance between fishermen seeking unemployment insurance and federal officials opposing the extension of unemployment insurance to fishermen was clearly in favour of the bureacrats. This balance was about to change.

Pressure was also coming from individual fishermen. A single letter from Quebec addressed to the minister of Fisheries, illustrates common themes: a) fishermen need help during the off-season; b) fishermen suffer because of falling prices; c) costs of fishing are rising; and d) fishermen expect that Parliament will take corrective action.31

Pickersgill Joins the Battle -1953

Proponents of fishermen’s unemployment insurance gained an influential ally when J.W. Pickersgill joined the cabinet in 1953. At about that time, a young civil servant in the Department of Labour, F.J. Doucet (later an influential official in the Department of Fisheries), was asked to review the question of extending unemployment insurance to self-employed fishermen. He reported that within the current framework of unemployment insurance its application to fishermen was impossible and that it was not a good idea anyway. Doucet was later told that when Pickersgill was shown the report he commented to Doucet’s superiors that “this is a fine report, but now ask the young man to show how it can be done.”32 Clearly, Pickersgill was determined to get his way on this issue.

Early in March 1954, likely under Pickersgill’s influence, Cabinet convened an Interdepartmental Committee to consider the extension of unemployment insurance protection to fishermen.33 W.C. MacKenzie, who will play a large role in this narrative, was asked to serve as representative of the Department of Fisheries.’ The Unemployment Insurance Commission then prepared a confidential memorandum to the Interdepartmental Committee summarizing the Commission’s view of the fishing industry.5 Drawing heavily on the 1951 report, it ostensibly opposed the extension of unemployment insurance to fishermen on the grounds that the premise of unemployment insurance was that eligible employees acted under a “contract of service” and this requirement was simply not satisfied for most fishermen. In yet another statement reminiscent of Bennett, the Commission noted that the Act could not be applied only to wage-earning fishermen and not sharesmen, because the work of the two groups was precisely the same. The Act therefore would have to cover everyone and certain fishermen then would have to pay the employers’ portion of the premiums as well as their own (1). In addition, there would be difficulties in determining the size of premiums (“contributions”) and the number of days for which premiums would have to be paid (because of problems of weather, closed seasons, etc.). There were also problems in defining the concept of unemployment for fishermen, and in ascertaining the facts of a claim since at the time fishermen rarely kept any records. Most fishermen were also virtually certain to be unemployed during the off-season, and it was “an elementary principle of insurance that one cannot insure against a certainty” (3). The conclusion drawn in the memorandum, however, was that these considerable administrative difficulties did not constitute the fundamental problem. Rather, the key issue was simply, and emphatically, “the fact that the fishing industry in Canada is not suitable to unemployment insurance” (3). The memorandum recommended that alternative methods be found for augmenting fishermen’s incomes.

It seems clear that there were a small number of major factors driving the opinions of the officials: (a) because of the structure of the fishing industry, unemployment insurance was inappropriate for fishermen; (b) covering fishermen would violate the precepts of the actuarial ideology; and (c) if any programme were warranted, it was an income supplementation scheme, not an insurance plan. Once the officials accepted these arguments, they were often willing to offer a range of essentially trivial objections to back up their position. While the details are interesting and deserve to be recorded, they are not to be interpreted as having much weight other than their immediate short-term usefulness. Doucet, for instance, may have been correct that unemployment insurance for fishermen was not a good idea, but, as subsequent practice has shown, he was wrong in concluding that it was impossible to adapt the unemployment insurance scheme to fishermen. In justice to his position, however, it should be recalled that the actuarial principle underlying the initial concept of unemployment insurance would have to be violated were the fishing industry to be covered.

The Interdepartmental Committee first convened on 5 April 1954. Introductory remarks were made by the Minister of Labour, M.F. Gregg (Liberal MP for YorkSudbury, New Brunswick), who emphasized that Cabinet hoped that at least a pilot project might be recommended.36 The continued opposition of the Unemployment Insurance Commission was noted, with several new objections:

a. with a poor fishing season or low fish prices, unemployment insurance benefits for fishermen would fall, whereas falling income is usually what triggers unemployment insurance benefits;

b. a plan for building up credits during the fishing season to provide benefits during the off-season, when fishermen would normally be unemployed, would reverse the usual practice for seasonal workers;

c. since fish prices might be affected as a result of the extension of unemployment insurance to fishermen, a countervail tariff claim might be forthcoming from the United States;

d. “there might be advantage in considering a form of benefit for fishermen like that provided for farmers through the Prairie Farm Assistance Act, instead of an extension of unemployment insurance” (2).

Despite these concerns, the committee directed the Department of Fisheries to consider arrangements which might be made to bring sharesmen and self-employed fishermen into the Canadian unemployment insurance system.

While the Interdepartmental Committee was meeting, additional pressure was being exerted. In May 1954, C.W. Carter, (Liberal MP for Burin-Burgeo, Newfoundland), presented to the Ministers of Labour (Gregg) and Fisheries (J. Sinclair, Liberal MP for Coast-Capilano, British Columbia), and to Pickersgill, a 10-page memorandum discussing a series of alternative approaches for including fishermen in the unemployment insurance system.3′ Carter systematically responded to the objections that had been made to extending the system. For instance, where the Act included a 40 per cent – 40 per cent – 20 per cent split for premium contributions from employee-employer-federal government, Carter proposed either that the fishermen and the federal government contribute or that the fisherman, the fish exporter and the federal government all contribute. The latter proposal was adopted in 1957. Carter concluded by arguing in favour of incorporating fishermen into the unemployment insurance system and against inventing a system analogous to the Prairie Farm Assistance Act.

Although the Fisheries representative on the Interdepartmental Committee, W.C. MacKenzie, believed that the political exigencies were such that an attempt had to be made to extend unemployment insurance to fishermen, at least to those employed on company-owned draggers (“In the view of the Committee, as I understand it, an attempt must [emphasis in original] be made to extend unemployment insurance to fishermen….”), he continued to believe that “unemployment insurance is not an appropriate form of social security for this class.”38 As Pickersgill described it, the civil servants stubbornly resisted the extension of unemployment insurance benefits to fishermen.

No action was taken at this time concerning fishermen, possibly in anticipation of the major revision to the Unemployment Insurance Act being prepared by the Unemployment Insurance Commission.

In its deliberations., the Commission recognized the pressure to extend unemployment insurance to excluded workers, noting that the “definition of insurable employment should be broadened to include some kinds of work which are not performed under contract of service” as long as the workers are “economically dependent on a particular employer and are just as liable to unemployment as persons who work under contract of service.”39 The programme would be extended to government, hospital and forestry workers, and to a few in agriculture and horticulture. The proposal stated that the “exceptions existing at present including fishing, agriculture and domestic service” (2) should be retained.

The proposal of the Unemployment Insurance Commission was then reviewed by the Interdepartmental Committee on Unemployment Questions’ which, while in broad agreement, commented that:

a) if the groups recommended by the Commission are included in the unemployment insurance scheme, then a serious effort should be made to include others where such insurance is badly needed but is difficult or risky (specifically mentioned are fishermen) (2);

b) the large Fund enables extra risks to be taken (5);41

c) since the current revisions to the Act could not receive Parliamentary approval until nearly the end of winter, and unemployment was severe [in the wake of the end of the Korean War], government should recommend that Parliament quickly increase the rate and duration of supplementary benefits under the present Act, while anticipating major revisions to follow (8). Even though the Interdepartmental Committee appeared to be more open to including fishermen in the ambit of unemployment insurance than was the Unemployment Insurance Commission, the effect of their recommendations was to defer decisive action into the indefinite future.

Cabinet Again Rejects Unemployment Insurance for Fishermen -1954

At the Cabinet meeting of 28 October 1954, the recommendations of its Interdepartmental Committee on Unemployment Questions were approved. These included, first, that “coverage be extended to all groups which it was practical to insure against unemployment” (20), relying on the large fund to cover those cases where risks were sufficiently irregular that it was not possible to make accurate actuarial evaluations (21), and second, “that a plan be developed and put forward for consideration which would provide unemployment insurance coverage or its social equivalent for fishermen.”42

Within a week, the Unemployment Insurance Commission published the results of a 1953 survey of the fishery in an eight-page report.43 While the 1951 report had noted (6) that the inshore fishery of Newfoundland alone employed 26,000 men on 9,000 small boats, the new report concentrated on larger vessels, of which there were approximately 2,800 actively participating in the fishery throughout Canada, only 113 of them in Newfoundland (2). Perhaps realizing that some form of extension of unemployment insurance to fishermen was inevitable, the Unemployment Insurance Commission was trying to limit the damage to the insurance concept as much as it thought possible. Omitting small inshore vessels would virtually eliminate Newfoundland from the system, which one can infer would not be satisfactory to the influential Pickersgill. Nevertheless, the Commission reiterated its view that the Act could be applied only to fishing vessels “where the conditions of employment approximate those of persons working for wages.” But to justify the obligatory extension of the system to at least some fishermen, it concluded that “in the great majority of cases (2,716) the skipper was in sole charge of the vessel” (3) and therefore that he could be assumed to play the part of employer (7). Thus, it would in practice make little difference whether the crew were paid wages or a share of the catch. Stretching the concept of wage-earning, the report stated that the sharesmen “are in the position of wage earners and it would not be unduly difficult to apply insurance to the crew members of such vessels” (6).

The Commission then proposed that benefits be extended to fishermen under limited conditions:

a. the vessel is of 10 tons or greater;

b. all crew on a vessel are covered except the skipper;

c. the skipper is deemed to be the employer and is responsible for seeing that the employees’ premium contributions are remitted to the government, and for paying the employer’s share of the premium;

d. the basis for both premiums and benefits would not be the individual’s earnings but rather the average earnings of fishermen in a geographical area;

e. fishermen would be considered unemployed during the fishing season only under specified circumstances (such as the loss of a vessel) and during the off-season only if they could prove that they did substantial work during the previous off-season (7-8).

The Department of Finance then entered the fray. In a “memorandum for file,” E.A. Oestreicher of the Economic Policy Division of the Department of Finance noted that “the existing Unemployment Insurance Act could be literally applied to the fishing industry.” He further remarked, however, that to do so “would mean the freezing into [the unemployment insurance system] artificial patterns of work … in the fishing industry as well as costly administrative adjustments” While clearly unhappy with the prospect of fishermen’s unemployment insurance, Oestreicher saw problems in the alternative as well, noting that the disadvantages of catch insurance were that it: (a) would set a precedent for agriculture; (b) would generate problems with US tariff policy; and (c) would be iniquitous, with the wrong people getting the most benefits.44

W.R. Martin, assistant secretary to the Cabinet, then summarized the situation, noting that, as an alternative to unemployment insurance, catch insurance would partly meet the complaint of fishermen that they are discriminated against with respect to fish plant workers (8). Martin considered in detail a proposal that would combine catch insurance and regular price support during the fishing season with a modification of the supplementary benefit programme to permit unemployment insurance coverage during the off-season. In an even-handed assessment, Martin argued first that the proposed scheme would help provide income stability while encouraging individuals to seek off-season employment. Second, he noted that fishermen would expect benefits to be paid at the end of each fishing season (11), thus violating the insurance principle that not everyone collects benefits.”5 He recognized that the Unemployment Insurance Commission remained opposed to the extension of its mandate to include fishermen.

At its 22 December 1954 meeting, Cabinet, again following a suggestion of its Interdepartmental Committee on Unemployment Questions, decided to proceed with amendments to the Act, despite the fact that an entirely new act was being prepared, because it felt the current unemployment situation required that increased supplementary benefits be paid immediately.’ No action was taken on the “large vessel” proposal of the Commission.

More Opposition from the Unemployment Insurance Commission -1955

In response to continuing pressure from politicians” and fishermen,48 the Unemployment Insurance Commission in mid-1955 prepared a new 10-page summary of the situation.49 The Commission noted that from the start of unemployment insurance in Canada in 1941 until 1948, “there was no demand from fishermen to be insured: quite the reverse. Most disputed cases involved persons employed in canneries or cargo vessels, who did not wish to contribute and contended that their employment was non-insurable because the product handled was fish” (1). Once unemployment insurance coverage was extended, however, to lumbering and logging (which was first seriously proposed in 1945, was applied in British Columbia in 1946, and was enacted on a national basis in 1950), and fishermen saw the benefit of unemployment insurance, interest increased and political pressures started.5′ The Commission then reviewed the Survey of 1951, noting that it had been submitted to the statutory Unemployment Insurance Advisory Committee in July 1951, but that from that time to the present (1955) the Advisory Committee had made no recommendations regarding fishermen’s coverage.52 According to this review, after 1951 representations continued to be received from fishermen, especially in Newfoundland, urging that coverage be extended to the fishing industry, or at least to those “parts of it as were manageable.” The report also claimed that the number of fishermen was “declining because fishing was not insurable and the men preferred to take other occupations where they would be insured” (4). The Commission’s report concluded, in what may have been a neat bit of sophistry, that unemployment insurance was clearly no solution to the fishermen’s problems since they “would be deemed to be continuously employed throughout the fishing season and would be barred from benefit in the off-season by the seasonal regulations. They would therefore be paying their contributions for nothing.” As a result, it would be “misleading and unfair” to expand coverage to fishermen. An alterative scheme to support fishermen’s incomes through price support legislation was discussed, with the analogy to crop insurance once again being drawn (10). Thus, as late as mid-1955, the Unemployment Insurance Commission remained determined to keep fishermen out of the system.53

On 8 June 1955, the Industrial Relations Committee of the House of Commons tabled its report on the new Unemployment Insurance Act, 1955 (which would replace the original Unemployment Insurance Act, 1940), approving a number of minor amendments and recommending, for future reference, that the government consider the advisability of extending the Unemployment Insurance Act to those fishermen who work for wages and to those who work in such other parts of the fishing industry as are amenable to coverage.’

During the debate that followed, C. Gillis (CCF MP for Cape Breton South, Nova Scotia) argued that political attitudes concerning fishermen’s unemployment insurance had changed:

Two years ago anyone suggesting that fishermen would be included at all in the act would be considered crazy, but during the deliberations [of the Standing Committee on Industrial Relations] and after continuing study by the commission, it was decided and recommended by the committee that there was a group classified as fishermen that might be brought under it, that is, about 6,000 wage earners that could be administered and handled under the act as it is today. That is a beginning.55

Seven other Members, representing fishermen’s districts in Newfoundland and British Columbia, spoke on the subject of fishermen. The Minister of Labour M.F. Gregg responded that the problem was being considered in a bifurcated fashion, with the Department of Fisheries preparing a plan for self-employed fishermen and the Department of Labour preparing a plan for wage earners (4642-3). The new Act did not incorporate any recommendations regarding fishermen, who remained outside the system.

The campaign continued with a telegram to the prime minister from M. Button (Liberal MP for Trinity South, Newfoundland) on behalf of fishermen in his riding, requesting the prime minister’s intervention to “secure unemployment insurance or assistance to fishermen without further delay. If we are to hold fishermen we now have to encourage our young men to carry on our great national industry.” A week later there was a letter to the minister of Labour from L.T. Stick (Liberal MP for Trinity-Conception, Newfoundland), proposing a scheme for fishermen similar to unemployment insurance. After emphasizing that the problem was critical, and noting that “the difficulties of bringing our fishermen under the present unemployment insurance Act” may require “that a separate scheme [is] necessary,” he commented that:

Our fishermen need encouragement if this important industry is to be saved, at the present time the number of fishermen is declining rapidly. The chief value of the outlined scheme is that it will encourage fishermen to keep on fishing to catch the required amount for them to qualify and in the months they cannot fish the assurance that they will have something to fall back on.57 One of the key arguments made at this time, therefore, was that rural Newfoundland was losing population and this drain could be stopped if fishermen’s unemployment insurance were implemented.58 It is difficult to imagine that these letters and other “bunched” appeals for fishermen’s unemployment insurance were not co-ordinated. In his Memoir, Pickersgill comments that he felt he should “confine [his] advocacy to the cabinet” but that he “encouraged backbenchers from Newfoundland to speak out in Parliament …” (418). Perhaps his “encouragement” went further.

The Department of Fisheries’ Final Warning -1956

In the face of this pressure, the deputy minister of the Department of Fisheries circulated to “all directors” a two-page note from W.C. MacKenzie, warning again against extending unemployment insurance to self-employed fishermen, because although “they incur risks,” they do not incur “the risk of being thrown out of employment through circumstances over which they have no control. Their major risks are market collapse and catch failure….” He continued: If there is dissatisfaction among this group of primary producers over their income position, as compared with that of fish plant workers, for example, the remedy should be sought in higher profit margins for them – not in a subsidy or dole masquerading as “unemployment insurance….” This is not to say that measures for protection against the risks mentioned cannot or should not be taken on an industry-wide basis. Price support legislation provides some protection….

MacKenzie concluded that unemployment insurance could be adapted for nonmanagerial fishermen but not for others.59

Profit margins, of course, were more likely to increase with fewer rather than more inshore fishermen, and unemployment insurance was likely to raise, not lower, the number of fishermen.

Cabinet Approval and Implementation 1956-1957

While the federal Department of Fisheries recognized that the population of fishermen had to be reduced, the Newfoundland government and Newfoundland’s members of Parliament refused to consider the partial depopulation of the industry. Since it was generally agreed that, if the population of fishermen were to be maintained, it had to be subsidized, and since the Department of Fisheries could not develop a suitable subsidy scheme, there was a standoff that had to be settled one way or another. Finally the long struggle came to an end.

During the spring or summer of 1956 four ministers of the St. Laurent Cabinet – Jean Lesage (Liberal MP for Montagny-L’ Islet, Quebec), minister of Northern Affairs and Natural Resources; John W. Pickersgill, minister of Citizenship and Immigration; James Sinclair, minister of Fisheries; and Robert Henry Winters (Liberal MP for Queens-Lunenburg, Nova Scotia), minister of Public Works came together for a private meeting.’ Only one of these ministers was accompanied by an aide. Among the subjects discussed was the desirability of extending the unemployment insurance system to fishermen. Pickersgill had favoured such an extension since his election in 1953. Sinclair and Winters were opposed; Lesage said little.

Pickersgill clinched the argument by noting that a federal election was expected in 1957 and that implementation of fishermen’s unemployment insurance would help to secure a number of marginal seats in fishing communities. When Pickersgill made clear to the others the political advantage of extending unemployment insurance, the opposition of Winters and Sinclair collapsed. So, after a “principled” debate that had extended over 20 years, the rawest of political motives decided the issue. The logic of the situation had been evident for some time; more than a year earlier, Harold Horwood, writing in the St. John’s Evening Telegram of 19 February 1955 had stated boldly that fishermen’s unemployment insurance was coming, that the Unemployment Insurance Commission would oppose it, and that it would not “be put into effect this year” because “The Government is saving fisheries unemployment insurance for election bait.” Time demonstrated the acuity of Horwood’s analysis.

The minutes of the Cabinet meeting of 10 August 1956 noted that the Minister of Fisheries (Sinclair) concurred in the recommendation of the Minister of Labour (Gregg) that appropriate interdepartmental arrangements be made to develop an insurance plan for fishermen for submission to the Cabinet as quickly and as effectively as possible.6′ The deed was done; this action was tantamount to Cabinet approval. No longer was there a hedged reference as in 1954 to extending coverage “to all groups which it was practical to insure against unemployment.” Cabinet, over the silent objection of Prime Minister St. Laurent,62 had finally approved the extension to fishermen.

In 1954, Pickersgill had ineffectually and indirectly told Doucet to “do it”; now “doing it” had unequivocally become government policy.

Implementation

Once the decision had been made, implementation was swift. The practical prob

lems that loomed so large for so long were quickly solved under the direction of the Interdepartmental Committee. Meanwhile, an amendment to the Unemployment Insurance Act was enacted 30 September 1956, mandating that fishermen’s contributions be collected from 1 April 1957, and that fishermen be eligible for benefits after 1 April 1958.63

The Interdepartmental Committee reported on 9 November 1956.64The committee tried to accommodate fishermen within the existing unemployment insurance system, noting among the difficulties that there was usually no ordinary employer/employee relationship, that the decision of whether or not to fish at a given time was made by the fisherman and not by an employer, and that earnings unlike wages, were fortuitous and not fixed in advance. To keep serious anomalies from developing, ordinary principles governing unemployment insurance had to be violated: by deeming the first buyer of fish as the “employer,” although the buyer did not exercise an employer’s control over the fisherman; by having no upper limit to insurable earnings for fishermen, unlike other workers; and by working out a system for determining the equivalent number of insured weeks when fishermen cure fish instead of selling the fish fresh (24).

Rearguard Resistance: the Unemployment Insurance Commission – 1957

At the time the decision was taken by Cabinet in August and the Interdepartmental Committee was established, it was agreed that the committee’s report would be referred to the Unemployment Insurance Commission. “It was also agreed that when the Commission had reviewed the initial plan and had proposals ready to submit to the Minister of Labour, these proposals would be studied by a senior committee” consisting of the Secretary of Cabinet (Chair), the Chief Commissioner of the Unemployment Insurance Commission, and the Deputy Ministers of Finance, Fisheries and Labour.65

The Interdepartmental Committee had proposed a scheme which integrated fishermen into the regular unemployment insurance system. Unable to disregard this proposal, but still firmly opposed to it, the Commission submitted two plans to the senior committee: Plan No. 1 was its own, providing for an insurance scheme unintegrated with the regular unemployment insurance system; Plan No. 2 was the proposal of the Interdepartmental Committee, fully integrating fishermen into the regular plan.

Plan No. had a flat contribution rate of 25 cents weekly for both the fishermen and the “employer” and a flat benefit rate of nine dollars single (12 dollars if married) per week. In qualifying for benefits, there would be no convertibility between contributions made under the fishermen’s plan and those made under the regular plan, that is, contributions made when fishermen worked for part of the year in a non-fishing industry, which was covered by unemployment insurance, could not be combined with contributions from fishing to determine eligibility for benefits. Plan No. 2 had the same variable (as opposed to “flat”) contribution and benefit rates as did the regular system and weeks credited towards qualification for benefits would be a combination of regular and fishermen’s “weeks.”

The advantages of Plan No. 1 from the perspective of the Commission were threefold: first, because of the flat rates it would be simpler to administer; second, because it clearly distinguished fishermen from participants in other occupations, the extension of unemployment insurance to fishermen would not constitute a precedent for other excluded groups; third, because benefits did not increase with earnings, the cost to government of the program would be less.

There were also disadvantages in Plan No. 1. One was that the flat benefit rate would serve as a disincentive for fishermen either to fish for higher priced species or to take non-fishing employment to increase benefits. Another was that a national flat rate would be difficult to rationalize because, to take an example, British Columbia fishermen had much higher fishing incomes than Newfoundland fishermen.

It was clearly understood from the start that fishermen’s unemployment insurance would be a subsidized income supplementation programme. In costing the plans, the Commission found that if all fishermen claimed unemployment insurance, Plan No. would cost the government (in addition to its legislated contribution: 20 per cent of premium contributions and the costs of administration) from $5.2 million to $7.5 million for seasons of 11 and 15 weeks, respectively, while Plan No. 2 would cost from $9.3 million to $12.6 million under the same conditions.

W.R. Martin, assistant secretary to the Cabinet and the Privy Council’s representative on the Interdepartmental Committee, saw the Commission’s proposals no later than 25 January 1957, for on that date he wrote an anguished letter to R.B. Bryce, the secretary to the Cabinet:

The fact that the Commission has submitted alternative plans for insuring fishermen worries me a good deal … Plan No. 1 is a non-integrated scheme that I understand emanated directly from the Unemployment Insurance Commissioners themselves. Plan No. 2 is more or less the scheme considered by the group of junior officials set up by the Cabinet last fall to deal with the matter. The proposal involves full integration with the regular unemployment insurance plan.

I understand that the Commission has put forward its own Plan No. so that it can be quite clear that this is a special project for fishermen alone … I find it hard to understand why the Commission has come up with this separate, non-integrated plan, particularly when it has been understood, certainly by a number of Ministers and many officials, that the fishing plan would be integrated with the unemployment insurance programme.

At the top of this note, neatly written in Bryce’s hand, appears the comment: “I think there is no danger of Plan No. 1 being approved. I suppose I am expected to kill it.”67 Presumably the reasons for preference for Plan No. 2 were first, that the expected financial costs would be less visible if buried in an existing framework, and second, fear that a separate system was more likely to attract countervail tariff action by the United States.

Bryce forwarded to Cabinet summaries of Plans 1 and 2 on 30 January 1957, noting that if the previously agreed implementation schedule were to be followed, a decision on which plan to adopt must be made immediately “to enable the Unemployment Insurance Commission to complete its administrative arrangements in time.”68 Cabinet acceptance of Plan No. 2 6 surprised no one.

The Unemployment Insurance Commission continued to show a determined lack of enthusiasm for implementing fishermen’s unemployment insurance. On 28 March 1957, only four days before the fishermen’s unemployment insurance plan was, by law, to come into effect, Martin again wrote an anguished memo to Bryce complaining that the required amendments to the Regulations had only been received the previous day, that it was impossible for him adequately to review them in the time allowed, and that he “cannot say that they will be satisfactory for the purpose for which they are passed.” He further noted that “if these Regulations are to have effect on April 1 they will have to be passed today and we can only hope that they will work.”‘o

The unvetted Unemployment Insurance Regulations were approved by Cabinet later that day.” And, on schedule, with the 1 April 1957 start of the new fiscal year, fishermen entered the unemployment insurance system.

Churchill’s admonition against covering industries “congested with a surplus … of labour” had certainly been ignored. Churchill had also expressed concern with the work disincentive effects of unemployment insurance. Whether their incorporation into the unemployment insurance system, gave fishermen an incentive to do less work as fishermen remains an open question.’2 The adoption of fishermen’s unemployment insurance, however, had a most perverse incentive effect of keeping fishermen attached to an industry “congested with a surplus … of labour.”‘3

Conclusion

Thus, after battling against fishermen’s unemployment insurance for nearly a generation, the bureaucrats were defeated. The issue was resolved not on the grounds of high principle, but for reasons of political expediency; the Liberal Party wanted to ensure that marginal fishermen’s seats were retained.

Were the bureaucrats right? It is clear that they were correct when they argued that unemployment insurance was not an appropriate form of social security for fishermen. They argued that, if support were to be offered fishermen, an alternative plan was required. Their attitude also was reflected by the government at the Cabinet meeting of 28 October 1954, where it was agreed that a plan be developed to provide unemployment insurance coverage or its social equivalent to fishermen. Yet, despite considerable effort, no adequate social equivalent has yet been devised.

The fundamental problem was that the wrong question was being asked. From the beginning of the debate, the goal of the advocates of fishermen’s unemployment insurance was to supplement fishermen’s low incomes. Their goal never had anything to do with unemployment insurance, and unemployment insurance was the wrong vehicle to accomplish their purpose, as the bureaucrats fully understood.

Since “income supplementation” is a euphemism for a form of subsidy, and given the importance of the United States market to Canada’s fisheries, and the American propensity to invoke countervailing tariffs in the face of foreign subsidies, Canada could not admit that income supplementation was the goal. Some device was necessary to conceal the subsidy. Unemployment insurance ultimately proved to be the only device that could both provide the income supplement and conceal its nature. Once implemented, moreover, the precarious economic state of fishing communities, especially in Newfoundland, made withdrawal of unemployment insurance benefits a political impossibility. Indeed, it has played a crucial economic role as a mechanism for transferring many millions of dollars from the federal government to the Atlantic provinces.

What was needed was a mechanism for reducing the number of families dependent on the fishery for a livelihood. Such a mechanism, and such a solution to the economic problems of the fishery and the fishermen, was politically and socially unpalatable.” Given the lack of will to solve the basic problem, the focus of debate has often shifted to the fishermen’s unemployment insurance system which, nevertheless, has survived for 40 years.

Major changes were implemented in 19977 which affected all participants in the unemployment insurance system, not only fishermen. Fishermen, however, as seasonal workers, were particularly disadvantaged by new rules that penalized repeated recipients of unemployment insurance benefits (now euphemistically called “employment insurance” benefits). None the less, focussed attacks on the inclusion of fishermen under the umbrella of unemployment insurance have always failed.76

By encouraging fishermen to remain in the industry, unemployment insurance, implemented as a fishermen’s subsidy, and intended as the solution to a short term political problem, became the single greatest hindrance to the long term adjustment of Canada’s Atlantic fishery into a commercially viable industry.

NOTES

This paper relies heavily on archival work and I take this opportunity to thank the following individuals who aided me in obtaining information: Brian Brothman, Ellen Scheinberg, Carole Berthelette, Ernie Fraser and Jim Whalen of the National Archives of Canada; Talia Chung of the Parliamentary Library in Ottawa; Bert Riggs of the Centre for Newfoundland Studies and Barbara Porrett, Government Documents Librarian, both of the Queen Elizabeth II Library of Memorial University of Newfoundland; and FJ. Doucet. Robert Mercer and Paul McCarthy provided research assistance. Helpful comments were received from two anonymous referees. I also thank Professors Susan McCorquodale and Gregory S. Kealey, and Tom Wise and Maureen Woodrow for reading and commenting on earlier drafts. I particularly wish to thank Mr W.C. MacKenzie for the benefit of his wisdom both in interviews and in his comments on an earlier draft. Finally I wish to thank the Institute for Social and Economic Research and the Vice-President (Academic), both of Memorial University, for financial support.

1. J.W. Pickersgill, Seeing Canada Whole: A Memoir (Markham: Fitzhenry and Whiteside, 1994). 2. For a detailed monograph on unemployment insurance as it relates to all seasonal workers, not just fisherman, see L.R. Lund, Unemployment Insurance and Seasonal Workers in Canada: 1940-1963 (MA thesis, University of Western Ontario, 1991). See also Lund, “`Fishing for Stamps’: the Origins and Development of Unemployment Insurance for Canada’s Commercial Fisheries, 19411971,” Journal of the Canadian Historical Association, new series, VI, (1995): 179-208. Lund argues that the Department of Labour was “mildly supportive” of the extension of unemployment insurance to fisherman (194-95).

3. L.A. Pal, State, Class, and Bureaucracy: Canadian Unemployment Insurance and Public Policy (Kingston: McGill-Queen’s University Press, 1988) 22.

4. Hansard’s Parliamentary Debates, House of Commons, Volume XXVI, 22 May-16 June 1911, 497502. References to this speech in the literature of Canadian unemployment insurance have a long history, dating back at least to J.L. Cohen’s The Canadian Unemployment Insurance Act: Its Relation to Social Security (Toronto: T. Nelson 1935) 114.

5. This capsule history is based on information drawn with much greater detail in J. Struthers, No Fault of Their Own: Unemployment and the Canadian Welfare State, 1914-1941 (Toronto: University of Toronto Press, 1983) and Pal, State, Class, and Bureaucracy. 6. The distinction between structuralist and institutionalist theories is drawn from C. Cuneo, “State, Class, and Reserve Labour: The Case of the 1941 Canadian Unemployment Insurance Act,” Canadian Review of Sociology and Anthropology XVI (1979): 147-70. 7. See Pal 8-11.

8. S. McBride, Not Working: State, Unemployment, and Neo-Conservatism in Canada (Toronto: University of Toronto Press, 1992) 159-61. 9. Cuneo 150. 10. Struthers 196.

I1. L.A. Pal, Rev. of Not Working: State, Unemployment, and Neo-Conservatism in Canada by S.

McBride, Labour/Le Travail 32 (1993): 310.

12. G. Dingledine, A Chronology of Response: The Evolution of Unemployment Insurance from 1940 to 1980 (Ottawa: Minister of Supply and Services, 1981 ) 11. 13. Pal 24.

14. These figures and the description of coverage are drawn from Dingledine 11, 20-29, 60. The 1968 and 1971 figures are not comparable with those from the 1940s, the base for calculating percentages being much narrower for the later years.

15. See, W.E. Schrank, “The Failure of Canadian Seasonal Fishermen’s Unemployment Insurance Reform During the 1960s and 1970s,” Marine Policy XXII (1998): 69. 16. Pal Chapter 5.

17. Pal may be entirely justified in neglecting this aspect of the state-centred model if it plays no role in explaining the adoption of the unemployment insurance system in 1940. Nevertheless, even if neglect is valid for 1940, we shall see it is not valid for the case of fishermen in 1956. 18. Official Report of Debates of the House of Commons: 21-22 George V (29 January- 21 February 1935) 277-1039 passim.

19. Official Report of Debates,12 February 1935, 726. Statutes of Canada, 1940, Chapter 44 (Part II of the First Schedule) 33. Statutes of Canada, 1955, Chapter 50, 10.

20. There was some discussion (955, 1037) of the meaning of this number since, according to the Annual Report of the Department of Fisheries for 1933-34, there were throughout Canada 65,391 fishermen. Bennett explained that approximately 10,000 fishermen were wage earners who according to the normal eligibility requirements should have been covered by the unemployment insurance scheme but would not be because of the fishermen’s exclusion. The work done by these wage earners was identical to that done by the remainder of fishermen who were either self-employed

or “sharesmen,” sharesmen being fishermen who worked for a share of the net revenues from the catch. Since most fishermen were not in an employee/employer or “contract of service” relationship, which is associated with a pre-stated rate of pay for a certain amount of work, they were not eligible for unemployment insurance. To have included the wage-earning fishermen while excluding their self-employed and sharesmen colleagues was seen as anomalous. 21. See, Official Report of Debates: W. Duff (Liberal MP for Antigonish-Guysborough, Nova Scotia), 955; A.W. Neill (Independent MP for Comox-Alberni, British Columbia) 772; and C. Marcil (Liberal MP for Bonaventure, Quebec) 957, respectively.

22. Survey of the Fishing Industry, Coverage Division – Insurance Branch, Unemployment Insurance Commission, Ottawa, April 1951 (National Archives of Canada [henceforth NAC], RG 23, Volume 1136, File 721-64-3 [Part 1]). That this study was begun in 1949 is made clear in “Unemployment Insurance for Fishermen,” Unemployment Insurance Commission, Ottawa, 16 May 1955 (NAC, RG 27, Volume 3456, File 4-2-5-7 [Part 1] 2).

23. The difference between 65,000 fishermen in 1933-34 and 88,000 in 1951 was primarily the result of Newfoundland joining Canada.

24. “Extract from Memo. 4 July [1950] by G.R. Clark [Assistant Deputy Minister of Fisheries] re Resolutions of U.F.& A.W.U. of B.C.” (NAC, RG 23, Volume 1136, File 721-64-3 [Part 1]). 25. The history of seasonal and supplementary benefits is convoluted. The original Unemployment Insurance Act (1940, Section 42) permitted the payment of benefits “for classes of persons… whose normal employment is for portions of the year, but only in occupations which are seasonal.” As early as 1944, the government considered the possibility of extending unemployment insurance coverage to certain seasonal workers. By regulation, in 1946, inland navigation was declared a seasonal industry whose workers fell under the Act. In 1948 stevedoring was added, as were lumbering and logging in 1950. Supplementary benefits were added in 1950, during the period of relatively high unemployment that preceded the start of the Korean War. While seasonal benefits were designed to be self-supporting, the supplementary payments never were, being to a substantial degree special benefit payments for workers out of work for so long that they had exhausted their regular unemployment insurance benefits. These benefits were a drain on the fund (see footnote 41, below) from the start. The new Unemployment Insurance Act, 1955, as implemented, washed out the old seasonal benefits, increased the rate of supplementary benefits, and renamed supplementary benefits “seasonal benefits.” These matters, as well as all changes in the Act and Regulations to 1980 are succinctly discussed in G. Dingledine.

26. In the province of Newfoundland alone, fishermen’s unemployment insurance benefit payouts exceeded premiums by more than $850 million during the nearly two decades from 1972/73 to 1990/91, hardly a result to be expected from an insurance plan [W.E. Schrank, B. Skoda, N. Roy and E. Tsoa, “Canadian Government Intervention in a Marine Fishery: The Case of Newfoundland, 1972/73-1980/81,” Ocean Development and International Law XVIII (1987): 533-84, and W.E. Schrank, B. Skoda, P.O. Parsons and N. Roy, “The Cost to Government of Maintaining a Commercially Unviable Fishery: The Case of Newfoundland, 1981/82-1990/91,” Ocean Development and International Law XXVI (1995): 357-90.

27. Letter from R. Gushue (Chief Supervisor of Newfoundland Fisheries, a federal position located in St. John’s) to L.S. Bradbury (federal Director of Newfoundland Fisheries, located in Ottawa), 23 October 1951. Presumably Gushue was here reflecting provincial pressures being exerted on the committee. Except for the minutes of its 42nd meeting (22 October 1951), which directed Gushue to write to the Unemployment Insurance Commission requesting information on its 1951 Survey, the minutes of the Committee’s 178 meetings (the last was held 31 March 1953) never mentioned fishermen’s unemployment insurance. Even the minutes of the 42nd meeting shed no light on the discussion. Gushue’s letter led to a meeting of Fisheries officials who concluded “that essentially the problem was one of economic security for the fishery rather than the narrow field of actual employment” and that consideration of the problem would continue. Although the written record is barren of detail, a memorandum from I.S. McArthur (Director of the Markets and Economics

Service of the Department of Fisheries) to J.B. Rutherford (Assistant Director, Markets and Economics Service) 4 December 1951 refers to a confidential letter from Gushue to the Deputy Minister, noting that the Fisheries Development Committee was considering alternatives to unemployment insurance. Nothing ever came of these considerations. (Memorandum of 4 December 1951 from McArthur to Rutherford is in NAC, RG 23, Volume 1136, File 721-64-3 [Part 1]; “Memorandum for File” by J.B. Rutherford, 6 December 1951 and letter from Gushue to Bradbury and are in NAC, RG 23, Volume 1136, File 721-64-3 [Part 1]. For “Minutes,” see NAC, RG 23, Volume 2005, File 794-17-3 [Parts I and 2]).

28. Memorandum from I.S. McArthur, Director, Markets and Economics Service, Department of Fisheries to H.S. Gordon, Esq., 5 June 1952 (NAC, RG 23, Volume 1136, File 721-64-3 [Part 1]). 29. Report of the Newfoundland Fisheries Development Committee, St. John’s: published by authority of the Hon. James Sinclair, (federal) Minister of Fisheries and the Hon. W.J. Keough, (provincial) Minister of Fisheries and Co-operatives (1953) 53-55. 30. “Fisheries Industrial Development Branch: Analysis of Interdepartmental Committee Report re: Walsh Report on Newfoundland Development,” sent under cover of 31 May 1955 from R. Hart (for the Chief Supervisor of Newfoundland Fisheries) to the Deputy Minister of Fisheries, Ottawa (NAC, RG 23, Volume 2005, File 794-17-3 [Part 2]).

31. Letter from G. Bourget, fisherman from Perce (Gaspe), to the Minister of Fisheries, 9 March 1952. Mr Bourget was no doubt disappointed in the response (29 March 1952) he received from Fisheries Minister R.W. Mayhew (Liberal MP for Victoria, British Columbia) that noted that the Unemployment Insurance Commission had made an exhaustive study of the question in the previous year (a reference to the 1951 Survey), concluding that “because fishermen are, for the most part, self-employed and their occupation is very seasonal in nature, there was no way by which the Act could be made applicable to fishermen.” (NAC, RG 23, Volume 1136, File 721-64-3 [Part 1]). 32. To date, this report has not surfaced in the National Archives of Canada. The version given here

was told to the author by Doucet in an interview in Ottawa, 26 April 1995. 33. Letter from M.F. Gregg, Minister of Labour, to R.B. Bryce, Secretary to the Cabinet, 8 March 1954 (NAC, RG2, Acc. 90-91/154, Box 89, File U-II-ll[b]).

34. Memorandum from S. Bates, Deputy Minister of Fisheries to W.C. MacKenzie, Director of Markets and Economics Service, 24 March 1954 (NAC, RG 23, Volume 1136, File 721-64-3 [Part 1]).

35. Unemployment Insurance Commission, “Memorandum: The Interdepartmental Committee on Extension of Unemployment Insurance to Fishing and Agriculture – THE FISHING INDUSTRY,” 25 March 1954 (NAC, RG 23, Volume 1136, File 721-64-3 [Part 1]). 36. Minutes of the First Meeting of the Ad Hoc Committee on Unemployment Insurance Coverage, 5 April 1954 (NAC, RG 23, Volume 1136, File 721-64-3 [Part 1]). 37. Memorandum from C.W. Carter to Hon. James Sinclair, Minister of Fisheries; Hon. Milton Gregg, Minister of Labour; Hon. J.W. Pickersgill, Secretary of State, 4 May 1954, “Proposed Plans for Unemployment Insurance for Fishermen” (NAC, RG 27, Volume 3456, File 4-2-5-7 [Part 1]). That Carter was engaged by the political process of extending unemployment insurance to fishermen is clear from an exchange at this time between Carter and A.R. Monroe of the fish processing firm, Fishery Products Ltd. Monroe had complained to Carter that “The conditions of Unemployment Insurance make working in the [fish processing] plants more attractive than fishing during a seasonal fishery.” Carter responded, in part, that “you blame the situation … [on the] social benefits of Confederation, especially that of Unemployment Insurance which is not available to fishermen…. As for the lack of Unemployment Insurance, to what extent have you supported the effort of those who have laboured to get this matter rectified…T’ (Arthur H. Monroe to C.W. Carter, 28 June 1954, and C.W. Carter to A.H. Monroe, 2 August 1954, both in the J.R. Smallwood Papers in the Centre for Newfoundland Studies, Queen Elizabeth II Library, Memorial University, Coll – 075, Box 305, File 4.04.007).

38. Memorandum from ME [Markets and Economics Service] to DM [Deputy Minister S. Bates] re: “Unemployment Insurance for Fishermen,” 17 September 1954. (NAC, RG 23, Volume 1136, File 721-64-3 [Part 1]). This memorandum was MacKenzie’s concluding report to Bates on the work of the Ad Hoc Committee on Unemployment Insurance Coverage that had first met on 5 April 1954. 39. Unemployment Insurance Commission, “Proposals for the Revision of the Unemployment

Insurance Act, September 1954″ (NAC, RG 27, Volume 3458, File 4-11 [Part 7]). 40. “Memorandum to Cabinet: Revision of the Unemployment Insurance Act,” submitted by R.B. Bryce, Secretary to the Cabinet and Chairman of the Interdepartmental Committee on Unemployment Questions, 27 October 1954 (NAC, RG 2, Volume 18, File 251-300 [Cabinet Document 235/54]).

41. From the time of original 1940 Act, unemployment insurance contributions were segregated in the govemment’s Consolidated Revenue Fund in a special account known as the Unemployment Insurance Fund (Dingledine IS). Starting from nothing in 1940, the Fund had grown to $881 million in 1954. 42. “Cabinet Conclusions, Meeting of October 28, 1954” (NAC, RG 2, Volume 2656 24). 43. Survey of Canadian Fishing Industry – 1954. Sent under cover of 3 November 1954 from D.J. Macdonnell, Chief Coverage Officer of the Unemployment Insurance Commission to Mr. W.C. MacKenzie, Director, Markets and Economics Service, Department of Fisheries (NAC, RG 23, Volume 1136, File 721-64-3 [Pt. 1]).

44. “Memorandum for File,” E.A. Oestreicher, 22 November 1954 (NAC, RG 2, Acc 1990-91/154, Box 89, File U-11-11[b], 1954-55).

45. Unemployment Insurance or its Social Equivalent for Fishermen,” sent under cover of letter of 6 December 1954 by W.R. Martin to I.S. McArthur, Chairman, Fisheries Prices Support Board (NAC, RG 23, Volume 1137, File 721-64-3 [Part 2]). 46. “Cabinet Conclusions, Meeting of 22 December 1954” (NAC, RG 2, Volume 2656). 47. In January, Pickersgill proposed a voluntary unemployment insurance scheme for fishermen which found little favor in the Privy Council Office, which was then favouring a catch insurance program. “Memorandum re: Unemployment Insurance for Fisherman” by J.W. Pickersgill, 10 January 1955 and a memorandum from W.R. Martin, Assistant Secretary to the Cabinet to R.B. Bryce, Secretary to the Cabinet, 11 January 1955 (NAC, RG 2, Acc 1990-91/154, Box 89, File U-11 -lI [bl,1954-55).

48. There was a steady stream of letters, visits and petitions from individual fishermen and fishermen’s organizations in Newfoundland, New Brunswick, Prince Edward Island, Quebec and British Columbia, to the minister and deputy minister of Fisheries, and occasionally to the minister of Labour, from the beginning of 1955 until the summer of 1956. There was not only a general belief that fishermen would soon be covered by unemployment insurance, but the Minister of Fisheries was “reminded” by U. Peirier of the Acadian Fishermen’s Co-op Assn. Ltd. of Wellington Station, Prince Edward Island in February 1956 that “within the last year or so, you have stated that some form of unemployment insurance coverage would be forthcoming soon for fishermen.” A similar reminder was sent to the Minister by E. Chiasson of Gloucester County, NB who stated that “our member, Mr Hedard Robichaud (Liberal MP for Gloucester, New Brunswick), gave us to understand that unemployment insurance would be available for fishermen this fall…” (NAC, RG 23, Volume 1137, File 721-64-3 [Part 2]).

49. “Unemployment Insurance for Fishermen,” Unemployment Insurance Commission, Ottawa, 16 May 1955 (NAC, RG 27, Volume 3456, File 4-2-5-7 [Part 1]).

50. A discussion of changes in the Regulations which extended seasonal coverage to logging and lumbering appears on pages 19,25 and 26 of Dingledine. While the argument made here was no doubt the opinion of the Commission, it is likely that Pickersgill was more correct in his Memoir when he attributed the irritant (or stimulus, depending on your point of view) to the fact that fish plant workers, but not the fishermen, received unemployment insurance.

51. The issue had been raised as early as three months after Newfoundland’s Confederation with Canada. See letter from Mr F Fleet of Dunfield to Premier J.R. Smallwood, 11 July 1949. J.R. Smallwood Papers in the Centre for Newfoundland Studies, Queen Elizabeth II Library, Memorial University, Coll – 075, Box 285, File 3.29.031.

52. This comment is probably unfair. Although I have not seen the letter transmitting the Survey to the Advisory Committee, the Committee’s minutes of 9-10 July 1951 note that “the Committee received as information [the] Survey of the Fishing Industry…” Presumably the Advisory Committee was not asked to comment (NAC, RG 27, Volume 889, File 8-9-26-5 [Part Three] 4). In the context of the discussions that led to the coverage of British Columbia loggers and lumbermen in 1946, the possibility of extending coverage to fishermen was also considered. The minutes (7) of the Unemployment Insurance Advisory Committee of 26-27 February 1945 record that “in regard to fishing the Committee concurred in the view of the Commission against recommending inclusion and also recommended further study of the problem” (NAC, RG 27, Volume 888, File 8-9-26-5 [Part 1]). The “further study” was commenced in 1949 and led to the Survey. The Advisory Committee returned to this subject in its annual report for 1948-49, again in the context of lumbermen’s and loggers’ coverage, again recommending exclusion “from insurance any person whose main occupation is farming or fishing …” (“Report of the Unemployment Insurance Advisory Committee for the Year Ending March 31, 1949,” NAC, RG 27, Volume 889, File 8-926-5 [Part 2] 8). Nothing else appears in the Advisory Committee records relating to fishermen’s coverage until after the 1957 effective date of such coverage.

53. It should be noted that this was an internal government report (as were most of those discussed in this paper) and, as such, was never publicized and therefore never attracted press comment. Many of these documents have only been recently released to the public by the National Archives of Canada.

54. Memorandum of 14 June 1955 from W.E. Duffett, Director, Economics and Research Branch of the Department of Labour, to A.H. Brown, Deputy Minister of Labour (NAC, RG 27, Volume 3458, File 4-11 [Part 7]).

55. House of Commons Debates: Official Report, 3-4 Elizabeth II (lo June 1955) 4628. Gillis, during the 1940 debates leading to the enactment of the Unemployment Insurance Act, 1940, had been one of the very few parliamentarians to argue in favour of including fishermen in the new unemployment insurance system. House of Commons Debates: Official Report, 4 George VI (26 July 1940) 1998.

56. Telegram from M. Button to Prime Minister St. Laurent, 31 January 1956 (NAC, RG 2, Acc 199091/154, Box 89, File U-Il-ll[b], 1956-57).

57. Letter from L.T. Stick to M.F. Gregg, Minister of Labour, 6 February 1956 (NAC, RG 23, Volume 1137, File 721-64-3 [Part 21).

58. In an interview held on 12 July 1995 in Ottawa, W.C. MacKenzie commented that in his recollection, it was less a desire to maintain the labour force, as a desire to maintain communities that was stimulating an interest in unemployment insurance for fishermen. Clergymen and merchants were at the time “agitated” by the thought of abandoning the communities. 59. Memorandum from W.C. MacKenzie circulated to “All Directors” under cover of 13 February 1956 from the Deputy Minister of Fisheries, G.R. Clark (NAC, RG 23, Volume 1137, File 721-64-3 [Part 2]).

60. The story of this meeting was told to me by its last surviving participant, who requested anonymity. Lund, (“Fishing for Stamps” 192, quoting Pickersgill [My Years With St. Laurent Toronto: University of Toronto Press, 1975] 227-8) provides a somewhat different interpretation of the roles of Sinclair and Winters.

61. “Cabinet Decisions,” 10 August 1956 (NAC, RG 2, Volume 5775 3). The structure of the interdepartmental committee and the procedure to be followed when the draft proposals had been prepared are outlined in a Memorandum for the Cabinet: Unemployment Insurance Plan; Fishermen; Establishment of Committee, Cabinet Document 169/56, prepared by R.B. Bryce, Secretary to the Cabinet, Privy Council Office, 9 August 1956 (NAC, RG 2, Volume 5830, File 169/56). 62. See Pickersgill 419.

63. See Dingledine 37-38 and “The Scope and Effects of Unemployment Insurance Coverage for Fishermen: With Special Reference to Modified or Substitute Schemes,” Economics Branch of the Department of Fisheries of Canada, May 1962 (NAC, RG 23, Volume 1137, File 721-64-3 [Part 7]: 12).

64. “Report of Interdepartmental Committee on Unemployment Insurance Plan for Fishermen” to the Unemployment Insurance Commission, Ottawa, 9 November 1956 (NAC, RG 27, Volume 3456, File 4-2-5-7 [Part 1]).

65. Letter of 23 January 1957 from W.R. Martin, Assistant Secretary to Cabinet, to A.H. Brown, Deputy Minister of Labour, transmitting the comments of the Unemployment Insurance Commission which were now to be reviewed by the senior committee (NAC, RG 27, Volume 3456, File 4-2-57 [Part 11).

66. The original plans, as presented by the Unemployment Insurance Commission, including cost figures, appear as two documents: “Unemployment Insurance for Fishermen, Plan #I” and “Unemployment Insurance for Fishermen, Plan #2,” 27 January 1957 (NAC, RG 27, Volume 3456, File 4-2-5-7 [Part 1]). A useful summary of the differences between the plans, including the advantages and disadvantages cited here, appears in a memorandum prepared by J.P Francis (a member of the Interdepartmental Committee) of the Economics and Research Branch of the Department of Labour to be sent by W.R. Dymond, the Director of the Economics and Research Branch to A.H. Brown, Deputy Minister of Labour, 28 January 1957 (NAC, RG 27, Volume 3456, File 4-2-5-7 [Part 1]). The summary that ultimately went to Cabinet is “Appendix A: Summary of Unemployment Insurance Plans for Fishermen” (NAC, RG 2, Volume 1891, File 21/57). 67. Memorandum from R.W. Martin, Assistant Secretary to the Cabinet to R.B. Bryce, Secretary to the Cabinet, 25 January 1957 (NAC, RG 2, Acc 1990-1991/154, Box 89, File U-ll-ll[b], 19561957).

68. Memorandum to Cabinet, “Unemployment Insurance Plan for Fishermen,” Document 21/57, 30 January 1957 from R.B. Bryce, Chairman, Special Interdepartmental Committee on Unemployment Insurance for Fishermen (NAC, RG 2, Acc 1990-91/154, Box 89, File U-11-llb, 1956-57). 69. NAC, RG 2, Volume 1892, Cabinet Minutes of 31 January 1957. 70. Memorandum from R.W. Martin, Assistant Secretary to the Cabinet to R.B. Bryce, Secretary to the Cabinet, 28 March 1957 (NAC, RG 2, Acc 1990-91/154, Box 89, File U-ll-llb, 1956-57).

71. The background document presented to the Cabinet for its 28 March meeting noted that the proposal had been prepared by the Interdepartmental Committee established by the Cabinet in August 1956 and opened with the comment that the “plan proposes a scheme for bringing fishermen under unemployment insurance in such a way that so far as possible there will be integration of all their contributions made in respect both of fishing and other insurable employment” (NAC, RG 2, Volume 1891, File “Cabinet Documents 71/57”).

72. See, N. Roy, E. Tsoa, W. Schrank and R. L. Mazany, “Unemployment Insurance and the Length of the Fishing Season,” Proceedings of the Sixth Conference of the International Institute of Fisheries Economics and Trade, Paris, July 6-9, 1992, Volume I, eds. M. Antona, J. Catanzano and J.G. Sutinen (Paris: Institut Franqais de Recherche pour l’Exploitation de la Mer, 1994). 693-713. 73. See W.E. Schrank, “The Failure” 73-6.

74. The economics and politics of excess capacity in the Atlantic fisheries are discussed in W.E. Schrank, “Extended Fisheries Jurisdiction: Origins of the Current Crisis in Atlantic Canada’s Fisheries,” Marine Policy XIX (1995): 285-99.

75. Major changes in the overall unemployment insurance program were proposed in the “Green Paper” introduced by Hon. Lloyd Axworthy (Liberal MP for Wmnipeg South Centre, Manitoba), Minister of Human Resources Development, Agenda: Jobs and Growth – Improving Social Security in Canada, A Discussion Paper (Ottawa: Human Resources Development Canada, October 1994). Amidst much controversy, the Employment Insurance Act, repealing and replacing the Unemployment Insurance Act of 1971, was tabled in Parliament on I December 1995 (see House of Commons Debates, v. 133, n. 269) and received Royal Assent on 20 June 1996. 76. See, Schrank, “The Failure.”

William E. Schrank is Professor of Economics at Memorial University. He has written extensively on fisheries modelling and policy and on the political economy of Newfoundland’s fishery.

Copyright Trent University Spring 1998

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