Employment Insurance Regulations - Amendments
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Past Amendments to (Main) Regulations
Resolution Amendments Analysis Statement
AMENDMENTS TO THE EMPLOYMENT INSURANCE REGULATIONS
SOR/2010-81
April 8, 2010
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issue and objectives
The transitional measures for two Employment Insurance (EI) economic regions (Madawaska — Charlotte in New Brunswick and Lower St. Lawrence and North Shore in Quebec) are scheduled to come to an end on April 10, 2010. The regulatory amendments extend and implement new rate calculation formulae to phase out the application of the transitional measures over a period of two years. The amendments also provide for the transitional measures to cease to have effect if, after March 12, 2011, the unemployment rate in the region as determined without the transitional measures results in the same number of hours of insurable employment being required to qualify for benefits as under the transitional unemployment rate.
Description and rationale
Background
Under the EI program, the establishment of EI economic regions ensure that people residing in areas of similar unemployment levels face comparable EI rules in terms of eligibility and length of benefit entitlement. Subsection 18(2) of the Employment Insurance Regulations requires that boundaries of the EI economic regions be reviewed at least once every five years for the purpose of determining if changes to the boundaries are appropriate. This ensures that the EI economic regions reflect current labour market conditions and geographic representation of communities across Canada.
The regulations establishing the current 58 EI economic regions came into force on July 9, 2000 (SOR/2000-268). The boundaries were established based on Statistics Canada data and other labour market information. However, the introduction of these EI economic regions had an impact that was greater than expected in two specific areas of the country: the regions of Madawaska — Charlotte in New Brunswick and Lower St. Lawrence and North Shore in Quebec. It was found that people in these two EI economic regions were adversely affected as the unemployment rates for these new EI economic regions resulted in a significant increase in the number of hours of insurable employment needed to qualify for EI benefits and a decrease in the number of weeks for which benefits may be paid in a benefit period.
In response to the negative impact that would have been experienced by many workers in these two EI economic regions, transitional measures were adopted to mitigate the impacts of the new boundaries over an adjustment period. As described in section 17.1 of the Employment Insurance Regulations, the approach adopted was to use the higher of the actual unemployment rate in the EI economic region as published by Statistics Canada or a blended unemployment rate as determined under subsection 17.1 of the Employment Insurance Regulations. The blended unemployment rate is determined by using the average of the actual unemployment rate for the region determined under subsection 17(1) and the average of the unemployment rate, as determined under subsection 17(1), for the adjacent EI economic region to which they belonged before the introduction of the new EI economic regions in July 2000 and the actual unemployment rate for the region as introduced in July 2000. The effect of these measures is to allow a higher unemployment rate to be used than would normally have been applied in the circumstances. As a result, claimants in the two EI economic regions require fewer hours of insurance employment to qualify for EI benefits, and receive benefits for greater number of weeks than would have been be the case without the transitional measures.
The transitional measures, with extensions, have been in place since September 2000 (SOR/2000-355). In 2008, the Government announced that the five-year review of the EI economic regions had concluded and that the extension of the transitional measures would last until April 10, 2010, in order to complete the adjustment period to the current boundaries and to ensure that the conclusion of these measures did not occur as the work season was ending for many.
Current situation
For Madawaska — Charlotte in New Brunswick, during the period from March 14, 2010, to April 10, 2010, if the unemployment rate of 10.3%, as determined under subsection 17(1) of the Employment Insurance Regulations had been used, a claimant would have needed 525 hours of insurable employment to be able to establish a benefit period for the purposes of receiving EI regular benefits; the minimum number of weeks of benefits that could have been paid would have been 26 and the maximum number of weeks, 50, depending on the number of hours of insurable employment that the claimant worked in his or her qualifying period. Due to the transitional measures, the average regional rate of unemployment determined under section 17.1 of Employment Insurance Regulations was used, resulting in an unemployment rate of 11.0%. Because the number of hours of insurable employment needed to qualify for benefits (and the number of weeks for which benefits be paid) is the same for EI economic regions where the regional unemployment rate is more than 10.0% but not more than 11.0%, claimants in Madawaska — Charlotte require the same number of hours of insurable employment to qualify for benefits (and are entitled to the same number of weeks of benefits) as if there were no transitional measures in place.
For Lower St. Lawrence and North Shore in Quebec, for the same period, if the unemployment rate of 9.7%, as determined under subsection 17(1) of the Employment Insurance Regulations, had been used, a claimant would have needed 560 hours of insurable employment to be able to establish a benefit period for the purposes of receiving EI regular benefits; the minimum number of weeks of benefits that could have been paid would have been 25 and the maximum number of weeks, 49, depending on the number of hours of insurable employment that the claimant had worked in his or her qualifying period. With the transitional measures, the average regional rate of unemployment determined under section 17.1 of the Employment Insurance Regulations was used, resulting in an unemployment rate of 11.2%. The number of hours of insurable employment required to qualify for benefits was therefore reduced to 490, the minimum number of weeks payable was increased to 28, and the maximum number of weeks payable was increased to 50.
Amendments
By these amendments to the Employment Insurance Regulations, the Canada Employment Insurance Commission is extending the transitional measures using the current rate calculation formula for Madawaska — Charlotte and the Lower St. Lawrence and North Shore EI economic regions from April 10, 2010 to August 6, 2011. Commencing March 13, 2011, however, the transitional measures will automatically cease to operate when the rate of unemployment for the region determined without the transitional measure and the rate of unemployment calculated under section 17.1 would result in the same number of insurable hours being needed to qualify for benefits (and the same number of weeks for which benefits may be paid). Furthermore, commencing August 7, 2011, the unemployment rate calculation formula will gradually be adjusted, as follows, to bring the unemployment rate as determined under subsection 17(1) and the transitional unemployment rate as determined under section 17.1 closer to a point of convergence:
- from August 7, 2011 to February 11, 2012, the unemployment rate will be the higher of the rate as determined by subsection 17(1) for the region and the sum of 85% of the unemployment rate determined under subsection 17(1) for the region and 15% of the unemployment rate determined under subsection 17(1) of the adjacent region; and
- from February 12 to April 7, 2012, the unemployment rate will be the higher of the rate as determined under subsection 17(1) for the region and the sum of 95% of the unemployment rate determined under subsection 17(1) for the region and 5% of the unemployment rate determined under subsection 17(1) of the adjacent region.
If not already concluded, the transitional measures will end on April 7, 2012.
The extension of these transitional measures will provide additional support to unemployed workers in these two regions as the economy recovers. While the transitional measures do not currently have an impact in the Madawaska — Charlotte region, the unemployment rate may evolve such that the transitional measures would have an impact on eligibility and duration of benefits in the future.
The total cost will be approximately $41.9 million and will benefit approximately 23 900 workers in two regions over three fiscal years.
Consultation
In 2000, Human Resources and Skills Development Canada (HRSDC) regional staff engaged in extensive consultations through local committees in both affected regions over an extended period of time following the implementation of the new boundaries. Since then, community representatives and individuals continue to engage HRSDC on this issue.
Implementation, enforcement and service standards
The effects of the provisions will continue to be monitored and will be reported in the Employment Insurance Monitoring and Assessment Report tabled in Parliament.
Contact
Mireille Laroche
Director
Policy Analysis and Initiatives
Employment Insurance Policy
Human Resources and Skills Development Canada
140 Promenade du Portage, Phase IV, 5th Floor
Gatineau, Quebec
K1A 0J9
Telephone: 819-994-4690
FAX: 819-934-6631