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Canadians to benefit from improvements to the Employment Insurance program
OTTAWA, ONTARIO, March 24, 2009—The Honourable Diane Finley, Minister of Human Resources and Skills Development, today announced several improvements to the Employment Insurance (EI) program to support Canadian workers affected by the current global economic crisis. The improvements will provide more support to workers and the unemployed in two key areas, specifically improvements to the delivery of EI, and the implementation of new EI measures announced in Canada’s Economic Action Plan.
The EI program is one of the key elements of Canada’s social safety net, enabling Canadian workers to better adjust to labour market changes and challenges, and the program acts as an economic stabilizer.
“The Government is aware of the challenges Canadians are facing in these extraordinary economic times, particularly as unemployment rises,” said Minister Finley. “One of our main priorities is to ensure that people receive their EI benefits as quickly as possible, and we have just taken significant additional steps to respond to increased claims, including new funding to support faster claims processing.”
The Government has implemented three improvements to enhance services to EI claimants by processing claims faster, cutting red tape for employers and improving the quality of information received. These include funding of more than $60 million for processing, including hiring additional staff, and the implementation of the extra five weeks of benefits and the increased duration of Work-Sharing agreements, as announced in Canada’s Economic Action Plan. The Government will monitor the effectiveness of these measures and adjust them as needed.
“Our government also recognizes that people who have been laid off may face more challenges finding a new job in these difficult economic times,” added Minister Finley. “Measures in our Economic Action Plan demonstrate our commitment to timely enhancements to the EI program to help Canadians adjust to the changing economy, including extending EI benefits and the duration of Work‑Sharing agreements, both measures that are already available.”
Improvements to the EI program in Canada’s Economic Action Plan include:
- temporarily providing nationally the advantages of an extra five weeks of EI benefits previously offered as part of a pilot project in specific regions with high unemployment. These measures also increase the maximum duration of benefits available under the EI program in areas of high unemployment from 45 to 50 weeks. These new measures, with an estimated cost of $1.15 billion, came into effect on March 1, 2009;
- extending the duration of Work-Sharing agreements to a maximum of 52 weeks for the next two years, and increasing access to Work-Sharing agreements through greater flexibility in the qualifying criteria, so more Canadians can continue working while companies experience a temporary slowdown and recover (at an estimated cost of $200 million);
- providing an estimated $500 million over two years to extend income benefits for long-tenured workers participating in longer-term training, and allowing earlier access to EI regular income benefits for eligible individuals investing in their own training using all or part of their severance package; and
- freezing the EI premium rate for 2010 at $1.73 per $100 of earnings—the same rate as 2009 and its lowest level since 1982—which is a projected $4.5 billion stimulus relative to break-even rates.
Through Canada’s Economic Action Plan, the Government is enhancing support to Canadians during the global recession, and is investing in the country’s long‑term growth. The Government is investing an unprecedented $8.3 billion in the Canada Skills and Transition Strategy to support workers and their families, including measures for income support, skills and training.
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Office of Minister Finley
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The Employment Insurance (EI) program provides temporary income support to those who have contributed to the program while they look for work; or take a temporary absence from work due to illness, childbirth or parenting, or because they are providing care or support for a family member who is gravely ill with a significant risk of death.
Eligibility for and duration of EI regular benefits, which can be paid to individuals who lose their job through no fault of their own, is based on the number of insured hours worked and on the unemployment rate of the EI economic region in which an individual lives—not the province or territory. This ensures that areas facing higher unemployment rates have lower entrance requirements and longer benefit durations.
Through the Variable Entrance Requirement, the current EI program has built-in flexibility specifically designed to respond automatically to changes in local labour markets, with entrance requirements easing and the duration of benefits increasing as the unemployment rate rises.
These requirements are adjusted on a monthly basis to reflect the latest regional unemployment rates. This ensures that the amount of assistance provided increases as the unemployment rate rises, and that support flows to regions and communities that are most in need. Since October 2008, 26 regions have seen their entrance requirements decrease and their benefit durations increase.
The Government has just announced a number of improvements to EI that will help Canadians adjust to the changing economy, and ensure that people receive their EI benefits as quickly as possible.
Improvements related to the delivery of Employment Insurance
New funding to speed up processing and implement new measures
The Government of Canada approved funding of more than $60 million to improve the delivery of EI, including hiring additional staff, and the implementation of the extra five weeks of benefits and the increased duration of Work-Sharing agreements, as announced in Canada’s Economic Acton Plan. The Government will monitor the effectiveness of these measures and adjust them as needed.
Streamlined reporting for Work-Sharing
To improve the speed of payment to Work-Sharing claimants and reduce the administrative burden on their employers, claimants will be exempted from submitting bi-weekly declarations, except when they have exceptional conditions to report, such as other employment, as is currently the case for maternity and parental benefits claims. This change will be especially helpful given the recent extension of the duration of Work-Sharing agreements.
Improvements to the Employment Insurance program in Canada’s Economic Action Plan
An extra five weeks of benefits
Canada’s Economic Action Plan includes new temporary measures that provide nationally the advantages of an extra five weeks of EI benefits previously offered as part of a pilot project in specific regions with high unemployment. These measures also increase the maximum number of weeks available by five weeks. In regions of high unemployment, the maximum increases from 45 to 50. The estimated cost of this extension of benefits is $1.15 billion.
This measure is on top of the automatic adjustments to EI that respond to changes in economic conditions; in particular, as unemployment rates increase, claimants can access EI with fewer hours and have additional weeks of benefits.
Claimants who participated in the Extended EI Benefits pilot project but did not receive the full five weeks of additional benefits may be entitled to the remaining weeks up to five weeks maximum, if their claims are still active. For example:
- A claimant living in a region where the maximum benefit entitlement was 42 weeks before the Extended EI Benefits pilot project could only have received up to three additional weeks of benefits before reaching the overall maximum of 45 weeks.
- Under the new maximum of 50 weeks, that person may be entitled to receive two more weeks of extended benefits, for a maximum eligibility of 47 weeks, to reach the total of five weeks.
All individuals whose claims for EI regular benefits begin between March 1, 2009, and September 11, 2010, will automatically be eligible for five additional weeks of regular benefits.
If individuals have an open claim on March 1, 2009, and they are still unemployed, then they could have access to up to five additional weeks of regular benefits. Eligible claimants with open claims will be notified in writing.
Extending Work-Sharing agreements
Work-Sharing is designed to help companies facing a temporary downturn in business avoid layoffs by offering EI Part I income support to workers willing to work a reduced work week while the company undergoes recovery. Under Work-Sharing, employers can retain employees and avoid expensive re-hiring and re-training costs. Employees are able to continue working and keep their skills up to date.
The Government has extended the duration of Work-Sharing agreements by 14 weeks, to a maximum of 52 weeks, and increased access to Work-Sharing agreements through greater flexibility in the qualifying criteria. These changes to the Work-Sharing program are available immediately for companies and their employees, and will be in effect from February 1, 2009, to April 3, 2010. This measure is estimated to cost $200 million over two years.
Freezing Employment Insurance premium rates
Through Canada’s Economic Action Plan, the Government has frozen the EI premium rate for 2010 at $1.73, which is the same rate as 2008 and 2009 and the lowest level since 1982. This will provide $4.5 billion in stimulus to the economy, and ensure that the premium rates for workers and employers will not increase during the economic downturn.
The newly created Canada Employment Insurance Financing Board will set the EI premium rates for 2011 and beyond. The Board will be directed to not increase the EI premium rates to recover the cost of the $2.9 billion in EI enhancements announced in Budget 2009.
Support for long-tenured workers
The Government will provide an estimated $500 million over two years to extend EI income benefits for long-tenured workers participating in longer-term training, with an estimated 40,000 workers expected to benefit. This investment will also allow earlier access to EI regular income benefits for eligible individuals investing in their own training using all or part of their severance package. Both of these measures are to be implemented in partnership with provinces and territories.
Expert Panel on maternity and parental benefits for the self-employed
The Government will be creating an Expert Panel to consult Canadians on how best to provide self-employed Canadians with access to EI maternity and parental benefits. These benefits could help self-employed parents better balance work and family responsibilities, and give them the opportunity to spend more time with their newly born or adopted children.