News Release Article from  Employment and Social Development Canada

Ensuring Employment Insurance program reflects local economies in the territories

February 18, 2014 – Ottawa, Ontario – Employment and Social Development Canada

The Government of Canada is announcing changes to the Employment Insurance (EI) program to better reflect the fact that the economy in northern Canada is amongst the strongest in the country and to align the administration of the EI program in the North with the rest of Canada.

With major resource developments on the horizon, the economic outlook for Yukon, the Northwest Territories and Nunavut is very promising, with significant income growth and job creation already realized and expected to continue in the coming years.

Across Canada, regional unemployment rates determine how much, and for how long, a person receives EI. However, since the 1970s, the unemployment rate used for EI in the territories has been arbitrarily fixed at 25 percent. This outdated policy does not reflect the true state of the economy in the North. According to Statistics Canada, the unemployment rate was 6.3 percent in Yukon, 8.0 percent in the Northwest Territories and 13.1 percent in Nunavut in January 2014. The latest unemployment rates estimated for the capital regions are particularly low. For example, the Whitehorse unemployment rate was estimated at 5 percent, the Yellowknife unemployment rate was estimated at 4 percent and Iqaluit’s unemployment rate was estimated at 5 percent. These rates are all well below the current administratively set 25 percent unemployment rate used in the territories for EI purposes.

Accordingly, as of October 2014, the Government of Canada is removing the arbitrary 25 percent unemployment rate and will use the actual unemployment rate in the territories for calculating benefits under the EI program, as is the case in the rest of the country.

In addition, the Government of Canada recognizes that jobs and opportunities differ greatly between the capital regions of Yellowknife, Whitehorse and Iqaluit and the more remote regions of each territory. Therefore, as of October 2014, each territory will be divided into two EI regions instead of one. One EI region will consist of each territory’s capital area and the other region will consist of the rest of that territory.

Collectively, these changes reflect the fact that the economy in northern Canada is amongst the strongest in Canada and ensures that the EI program is more closely aligned to the economic realities in the territories. The Government of Canada will continue its focus on the North and will continue to work with the governments in the three territories to create jobs and economic growth for those who call the region home.

The Honourable Jason Kenney, Minister of Employment and Social Development, will be in Yukon, the Northwest Territories and Nunavut between February 19 and 22 to explain and discuss these changes. Technical briefings are available to media upon request.

Quick Facts

  • At 6.3 percent, Yukon has the third-lowest unemployment rate in Canada and has enjoyed 10 successive years of economic growth. According to the Conference Board of Canada, the Northwest Territories is poised for high economic and job growth as mines open in the coming years, with 7.9 percent economic growth anticipated in 2016. And Nunavut's economy is expected to outpace the rest of Canada's by a substantial margin this year and next, with 3.7 percent and 9.5 percent growth respectively.

Quotes

“The Government of Canada’s top priorities are creating jobs, economic growth and long term-prosperity. These changes better align the EI program with the growing economies of the territories and ensure that those living in similar labour market conditions receive similar benefits right across the country. Our government is committed to a national EI program that is fair, flexible and responsive to labour market conditions.”

- The Honourable Jason Kenney, Minister of Employment and Social Development and Minister for Multiculturalism

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Contacts

Alexandra Fortier
Office of the Minister
819-994-2482

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Employment and Social Development Canada
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Backgrounder


With major resource developments on the horizon, the economic outlook for Yukon, the Northwest Territories and Nunavut is very promising, with significant income growth and job creation already realized and expected to continue in the coming years. At 6.3 percent, Yukon has the third-lowest unemployment rate in Canada and has enjoyed 10 successive years of economic growth. According to the Conference Board of Canada, the Northwest Territories is poised for high economic and job growth as mines open in the coming years, with 7.9 percent economic growth anticipated in 2016. And Nunavut's economy is expected to outpace the rest of Canada's by a substantial margin this year and next, with 3.7 percent and 9.5 percent growth respectively.

The Employment Insurance (EI) program compensates for differences in labour market conditions across the country by determining eligibility for regular and fishing benefits, entitlement weeks for regular benefits and the benefit rate for all claimants (excluding self-employed) based on regional unemployment rates. To reflect regional labour market conditions, the EI program currently divides the country into 58 geographic regions.

The Government of Canada is changing the way regional unemployment rates are established in Yukon, the Northwest Territories and Nunavut (the territories) to align with the rest of Canada. It will also replace the existing three EI economic regions with six new EI economic regions in the territories. This approach will make the EI program more responsive and reflect regional labour market conditions in the territories.

The regional unemployment rates currently used in the three territories for the purposes of EI are administratively set at 25 percent. This does not reflect labour market realities because unemployment rates are actually significantly lower. According to Statistics Canada, the unemployment rate was 6.3 percent in Yukon, 8.0 percent in the Northwest Territories, and 13.1 percent in Nunavut in January 2014. The latest unemployment rates estimated for the capital regions are particularly low. For example, the Whitehorse unemployment rate was estimated at 5 percent, the Yellowknife unemployment rate was estimated at 4 percent and Iqaluit’s unemployment rate was estimated at 5 percent. These rates are all well below the current administratively set 25 percent unemployment rate used in the territories for EI purposes.

 

To remain responsive to sudden changes in economic conditions, while also offering some protection against statistical variability, the unemployment rate will be determined using the higher of a seasonally adjusted 3-month-moving average or a 12-month-moving average unemployment rate (as calculated by Statistics Canada based on Labour Force Survey data).

In addition, to account for differences in labour market conditions between the capital and non-capital area of each territory, current EI economic regions in the territories will be replaced by six new EI economic regions: Whitehorse, Yukon (not including Whitehorse), Yellowknife, Northwest Territories (not including Yellowknife), Iqaluit and Nunavut (not including Iqaluit).

These changes will be implemented on October 12, 2014. The Government of Canada is providing notice to ensure that claimants are aware of the changes and can make additional efforts to adjust their work patterns, if necessary.

 

New EI Economic Region Maps for the territories:

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