The Province of Prince Edward Island is concerned about the potential negative impact changes to the Employment Insurance (EI) program will have and is communicating those concerns to the federal government, says Minister of Innovation and Advanced Learning Allen Roach.

"Our seasonal industries - fishing, agriculture and tourism - are the backbone of our economy," said Minister Roach. "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."

On Tuesday, Minister Roach appeared before the Standing Committee on Fisheries, Transportation and Rural Development to brief the committee on what concerns have been communicated to the federal government to date, what steps the provincial government is taking moving forward, as well as the findings of the Working Group on Employment Insurance.

Minister Roach told the committee on Tuesday that research completed by the working group shows EI accounts for about nine per cent of labour income on PEI and 26 per cent of PEI's workforce accesses EI at some point during the year. Minister Roach also presented information from Statistics Canada that shows although PEI is the province most reliant on EI, when work is available during peak season (July and August) PEI's labour force participation rate is above the national average at about 71 per cent, second only to Alberta.

"A review of the potential impacts of employment insurance changes will have on Islanders has been completed and it supports what Islanders are saying," said Minister Roach. "We have several recommendations in response to the federal government's announced changes and I have forwarded these suggestions to Minister Finley for consideration."

For example, the Extended EI Benefits pilot project provided an additional five weeks of benefits, to a maximum of 45 weeks, in 21 economic regions including PEI. This pilot ended on September 15, 2012. The province has recommended in a letter to the federal government that this pilot project be renewed.

Since the federal government's announcement of their intention to implement changes to the EI program in March 2012, the provincial government has been working to communicate Islanders' concerns through media statements, written letters to the federal government, and meetings with federal cabinet ministers.

"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," added Minister Roach.

BACKGROUNDER

Summary of EI changes with a sample of the Province’s recommendations in response:

• Enhanced Labour Market Information - EI claimants will receive two emails per day on available job listings, up from three Job Bank listings every two weeks.

- Province’s recommendation: The Government of Prince Edward Island supports this initiative.

• New Definitions of Reasonable Job Search and Suitable Employment - Claimants’ obligations will be made more clearly defined and enforceable. A record of a daily job search will be required, when requested, to maintain benefits. Suitable Employment will include employment within a one-hour commute or higher, based on previous work history.

- Province’s recommendation: 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. There should be alternate reporting mechanisms for those who are unable to comply with obligation to produce a job search log because of functional illiteracy. Service Canada staff should be trained to assist claimants with filing and reporting.

• New Claimant Categories - All claimants will now be placed in one of three categories: Long-tenured workers are those 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 include those who have had three or more regular and/or fishing claims and received more than 60 weeks of regular and/or fishing benefits in past five years. Occasional claimants are those not captured under the definitions of long-tenured or frequent.

- Province’s recommendation: It’s recommended that the three-tier classification concept 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, it’s recommended that 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 Working While on Claim Pilot - The new program is a modification of 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, HRSDC announced an adjustment to allow some claimants to opt into old rules.

- Province’s recommendation: 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 that the incentive to work while on claim would be enhanced if workers could keep, for instance, $100 or 40 per cent of claim without clawback and 50 per cent of subsequent earnings. Another option would be to lower clawback rate from 50 per cent to 33 per cent or lower. The October 5 adjustment may mitigate some of the impact, but create two classes of workers on claim.

• Changes to Best Weeks Pilot - The number of weeks to be used in calculating EI benefits will range from 14 to 22, depending on the unemployment rate in the region. In regions of higher unemployment, fewer best weeks will be used in the calculation.

- Province’s recommendation: Given the significant and comprehensive EI changes, including the sunset of the Extended EI pilot and newly implemented definitions of suitable employment and reasonable job search, it is recommended that the federal government postpone changes to the Best Weeks pilot until the full impact of the other changes are known.

• Changes to Temporary Foreign Workers (TFW) claims - HRSDC announced it will create a link between the EI program and the TFW program.

- Province’s recommendation: Efforts to link the two programs should strike a balance between connecting unemployed Canadians with suitable employment and the labour force needs of employers.

• Changes to Appeal Process - A new tribunal with 39 full-time members to hear EI appeals will replace about 1,000 part-time local members of the Board of Referees and 32 umpires.

- Province’s recommendation: Appeal mechanisms should include individuals knowledgeable on local labour market conditions and customs and provide for local access to appeals. Also, sufficient staff should be available to ensure that backlogs do not develop and appeals are dealt with in a timely manner, especially in situations where benefits are suspended.