Last June the Omnibus budget Bill, C-38, was passed which pushed through legislated changes to the Employment Insurance (EI) system that were deemed detrimental to unemployed individuals across the country, but especially in the Atlantic provinces. This past Sunday the changes, which force some claimants to accept lower paying work that is farther from home, came into effect.
Details of the changes include a definition of reasonable job search, the creation of three categories of users (frequent, occasional, and long-tenured), and the definition of ‘suitable employment’. Under the new rules, users will be forced to take lower wage jobs sooner than other EI claimants (between 70% – 90% of previous pay). Low wages and unemployment can quickly pave a path to poverty. EI acts as an important transition between employment and welfare, the social system of last resort that essentially forces you to deplete your wealth in order to receive benefits (that are well below poverty levels).
Other changes include an onus on EI recipients to demonstrate they are actively job searching by attending job fairs, applying for job banks and reporting all job search efforts. The federal government estimates that 8,000 Canadians could be removed from EI payrolls because of the new changes, and expects to payout less benefits overall.
With concern for the changes, Dignity for All wrote a letter to the premiers prior to the Council of the Federation meeting last July encouraging them to discuss the impact of EI changes on provincial finances. The premiers of the Atlantic provinces had been vocal in their frustration with the new changes considering the number of seasonal workers in the region. When seasonal industries shut down, many workers are forced to take EI. (Also see CWP’s blog on the Huffington Post last July about this as well).
Residents who work in seasonal industries and some Atlantic MPs have protested the changes but to no avail, and recent news reports in Nova Scotia and PEI confirm that frustration remains high over changes; especially the prospect of accepting lower paying work while trying to maintain the regular costs of a household.
The Atlantic provinces have a mixed record in terms of employment statistics. According to the Statistics Canada Labour Force Survey for December 2012, employment rose in Newfoundland and Labrador as well as Prince Edward Island, but fell in Nova Scotia by 5,000. That is almost a 2% drop from December 2011. Newfoundland and Labrador has been leading the provinces in employment with gains of 3.7%, but this is not representative of the region as a whole.
While the unemployment rate is sitting at 7.1%, its lowest level in four years (that is a total of 1,357,200 people) the Canadian Labour Congress (CLC) noted in a blog post that only 37.9% of individuals out of work have access to EI. They also mention that when considering age groups, youth unemployment (between 15 – 24 years of age) is double the national number at 14.1%. CLC President Ken Georgetti stated in the post, “By latest count there are 5.3 unemployed people for every job vacancy. This government and employers should be providing training and apprenticeship programs so that unemployed workers can be better matched to the jobs that are available.”
Angella MacEwen senior economist at the CLC stated in an email to CWP that, “Changes to EI that were introduced in the 2012 Budget are part of a broader low-wage agenda. Government should be gathering and disseminating better labour market information, and working with business, education providers, and labour to improve workplace skills. Instead, they are focusing on tightening access to a system that is already remarkably inaccessible and ungenerous.”
EI is a system that is funded by workers, not taxpayers. It is critical that the system be supportive to those between employment so as to ease financial stress on individuals and families when looking for work. Forcing recipients to accept low wage work could push household finances to the edge, which is detrimental to individuals and families as well as local economies.
