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Oct 25, 2012

P.E.I. voices concern about proposed EI changes

Province has most seasonal economy in Canada: Minister
    
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Prince Edward Island is voicing concerns out about proposed changes to Canada’s employment insurance (EI) program.

"As the province with the most seasonal economy in the country, we want to ensure Prince Edward Island is not disadvantaged in this major program transition. It is our hope that the federal government will be willing to work with our government to achieve a positive outcome for islanders," said Minister of Innovation and Advanced Learning Allen Roach.

EI accounts for about nine per cent of labour income on the island and 26 per cent of PEI's workforce accesses EI at some point during the year, he said. However, when work is available during peak season (July and August) the province’s labour force participation rate is above the national average at about 71 per cent, second only to Alberta, said Roach, citing Statistics Canada numbers.

"Our seasonal industries — fishing, agriculture and tourism — are the backbone of our economy," he said. "We need the federal government to consider the strong seasonal nature of our province and work with us to ensure changes to the EI program do not negatively affect islanders and our economy. Seasonal employees and employers are skilled workers who ensure our province's livelihood and they rely on employment insurance to bridge the gap between seasonal employment. Negatively impacting our seasonal workers and their employers will negatively impact our province as a whole."

A Working Group on Employment Insurance for the province has forwarded several recommendations in response to the federal government's announced changes to Diane Finley, minister of human resources and skills development, for consideration.

Proposed changes and P.E.I.’s response

The extended EI Benefits pilot project provided an additional five weeks of benefits, to a maximum of 45 weeks, in 21 economic regions including P.E.I. This pilot ended on Sept. 15, 2012, and P.E.I. has recommended this project be renewed.

The province agrees with the enhanced labour market information that would see EI claimants receiving two emails per day on available job listings, up from three listings every two weeks.

When it comes to the new definitions of reasonable job search and suitable employment, applicants will require a record of a daily job search, when requested, to maintain benefits. And “suitable employment” will include employment within a one-hour commute or higher, based on previous work history.

But in the first year of implementation, benefits should not be suspended for claimants found not fully in compliance with the job search rules, but who can demonstrate some job search activity, said P.E.I.

“There should be alternate reporting mechanisms for those who are unable to comply with (the) obligation to produce a job search log because of functional illiteracy. Service Canada staff should be trained to assist claimants with filing and reporting.”

In addition, all claimants will now be placed in one of three categories: Long-tenured workers who have paid into the EI system for the past seven of 10 years and who over the last five years have collected EI regular or fishing benefits for 35 weeks or less; frequent claimants who have had three or more regular or fishing claims and received more than 60 weeks of regular or fishing benefits in the past five years; and occasional claimants not captured under the definitions of long-tenured or frequent.

But P.E.I. is recommending this three-tier classification be studied to assess its impacts on the seasonal workforce in terms of labour availability for employers, overlap of labour force requirements in seasonal industries, and worker income. The study should aim to answer these questions:

•Has employer choice been reduced?

•Has the availability of experienced workers at the start and peak seasons of each industry been disrupted?

•Do the requirements push workers to or below the poverty level?

If implementation proceeds, the P.E.I. government recommends seasonal workers: are able to terminate their off-season work to return to a higher-paying seasonal job without losing EI eligibility after their seasonal work ends; a worker who accepts a job at a lower hourly wage not have this lower wage rate used as a benchmark for suitable employment during subsequent EI claims; ensure that work always pays and, to maintain consistency with other categories of claimants, Family Supplement recipients should not be required to seek employment paying less than 15 per cent above their supplemented benefit and consideration be given to link the reduced levels of pay to the local unemployment rate such that workers who live in high unemployment regions take longer to move to a reduced rate of pay.

Changes to the Working While on Claim pilot would modify an existing pilot that allowed claimants to earn up to $75 or 40 per cent of their weekly benefit, whichever was greater, without comprising their benefits. The new pilot allows claimants to keep 50 per cent of total earnings from working while on claim to a maximum of 90 per cent of weekly earnings. Earlier this month, Human Resources and Skills Development Canada (HRSDC) announced an adjustment to allow some claimants to opt into old rules.

The P.E.I. government said HRSDC should closely monitor the impact of the new rules to determine whether work effort or claimant income is being negatively affected. The province had recommended the incentive to work while on claim would be enhanced if workers could keep, for instance, $100 or 40 per cent of claim without a clawback and 50 per cent of subsequent earnings.

Another option would be to lower the clawback rate from 50 per cent to 33 per cent or lower. The Oct. 5 adjustment may mitigate some of the impact, but create two classes of workers on claim, said the provincial government.

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