EI stats drop in Atlantic Canada after changes aimed at seasonal work: economist

ST. JOHN’S, N.L. – A disproportionate drop in employment insurance recipients in Atlantic Canada suggests federal EI restrictions are having a negative impact that will only get worse as seasonal industries lay off staff, critics say.

“Those changes target seasonal workers,” said Erin Weir, an economist with the United Steelworkers Canadian national office. “We’ve already seen in the data that the number of employment insurance recipients has been cut more sharply in the Atlantic provinces than nationally.

“We’re not seeing a decline in unemployment, but we are seeing a decline in employment insurance,” he said from Regina. “And that would seem to reflect federal policies that are kicking people off benefits.”

Weir said the number of jobless workers has been stuck at around 1.4 million for at least the past year.

Yet, Statistics Canada reports that the number of those receiving EI benefits in July was down almost six per cent across Canada from the year before. That compares to a drop of 11 per cent over the same time period for Newfoundland and Labrador, 16 per cent in P.E.I., 12 per cent in Nova Scotia and nine per cent in New Brunswick.

In Ontario, Quebec and Alberta, the decline in EI benefits for each province was about three per cent.

B.C. had a drop of 11.5 per cent, Manitoba 12 per cent and Saskatchewan seven per cent.

The federal Conservative government says EI changes it implemented in January are a “modest and reasonable” effort to ensure the system is fair and flexible.

Those adjustments do not change eligibility requirements such as the number of insured hours to qualify, says an emailed response from Employment and Social Development Canada. Rather, they clarify long-standing job search requirements for all recipients — including repeat claimants, it says.

“Claimants are only expected to look for work within their communities, no greater than one hour’s commute away. Moreover, personal circumstances are taken into account, such as the availability of public transportation and access to child care.”

Weir says the statistics speak for themselves.

“I do think we’re seeing the consequences of federal cutbacks to EI,” he said.

Lana Payne, Atlantic director of the new Canadian amalgamated union Unifor, said the big question is the extent to which Ottawa will enforce its clarified job search rules this winter.

She says she believes there is an ulterior motive for the push to get seasonal workers off benefits and into often poorly paid, service-sector vacancies.

“These kinds of changes were really about trying to cater to low-wage dependent employers,” she said. “They kind of missed the whole point that perhaps what we need to be doing to attract people to jobs in other communities means that we have to increase the wages to get them there.”

Payne calls it a wrong-headed attempt to get tough on the unemployed.

“I’d rather they get tough on unemployment, quite frankly.”

Brian Lee Crowley, managing director of the non-partisan Macdonald-Laurier Institute think-tank in Ottawa, said recent EI changes don’t go far enough.

The program is still “an incredibly unfair, unjust, exploitative system” that subsidizes seasonal employers, he said in an interview.

“And it’s not the people in Atlantic Canada who are being exploited by it. It’s the people in seasonal industries in Atlantic Canada who are exploiting other people who never draw on the system and who expect to work all year to keep themselves and their families in the conditions that they think are appropriate for them.”

Crowley concedes that some industries such as tourism, fishing and agriculture are cyclical. But before EI, workers switched jobs with the seasons, he said.

The option to collect EI benefits rather than work creates a terrible incentive, he added.

“We’ve said to them: ‘Okay, work for a short period of time in one industry and you’re off the hook for the rest of the year.’ And that in itself has created a vast amount of unemployment in Atlantic Canada.”

Crowley said the federal government should charge higher EI premiums to employers who repeatedly lay off staff.

“We have a system in which the seasonality of the economy is not caused by the nature of the industry, but is driven by the incentives within the employment insurance system.”

Looking for more?

Get the Best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.