Changes to Employment Insurance

Transcription

1 Changes to Employment Insurance The Peterborough and District Labour Council is asking Peterborough City Council to support the following changes to Canada s Employment Insurance: 360 hours to qualify for EI benefits in all regions of Canada Increase benefits duration to 50 weeks for all workers in all regions Increase benefits to at least 60% of normal earnings, using workers 12 best weeks, and raise the maximum Suspend the allocation of severance pay Eliminate the 2 week waiting period Other municipalities in Ontario, including Sudbury, Southwest Oxford Township, Stratford, Kingston, Lambton County, Ingersoll, Markham, Hamilton, Newmarket, Vaughan and Brantford have passed similar resolutions this past spring. In addition, the Federation of Canadian Municipalities (FCM) passed a resolution supporting EI reform at its annual meeting in Whistler, B.C. in early June. The Labour Council states in its letter to the City, that media reports indicate that the City of Peterborough is facing a 34% increase in the number of residents on Ontario Works this year. Further that if EI was reformed by reducing the number of hours to qualify for EI to 360 hours and increasing the benefits to 50 weeks and at least 60 % of earnings, the impact on Ontario Works would be reduced. Further, studies have shown that improvements to the EI program would help to support household spending which in turn, helps local businesses and reduces job losses. Peterborough has suffered greatly from the loss of manufacturing jobs. While the media focus has been on Oshawa because of the loss of jobs at the GM plant there, we know that many people who work in Oshawa live in Peterborough. There have also been direct job losses here in Peterborough, for example at the Fishercast, MCCI and Craytech work sites. In addition many companies are laying off smaller numbers or are shutting down for short terms. These layoffs fly under the radar of public knowledge but do negatively impact the individuals and their families as well as our community s overall economic health states the Labour Council. Below, is the Labour Council s comparison of the proposed recommendations in the resolution to the current legislation.

2 Recommendations: 1) Reduce the number of hours to qualify for EI to 360 hours in all regions of Canada. Currently the number of hours required to qualify for EI varies across the country. You need anywhere from 360 to over 900 hours to qualify. In areas of high unemployment such as the Maritimes and parts of Quebec, you need less than the 720 hours required in Peterborough. We are informed that over 50 % of the appeals to the Peterborough Board of Referees are made by claimants who do not have the required number of hours. As a result of the tough eligibility requirements, only 54% of unemployed workers qualified for EI in 2007 and only 41% actually got benefits. Under the present legislation, the eligibility requirements are even more stringent for young workers or newcomers entering the workplace for the first time. First time entrants must have 910 insurable hours to qualify for EI. This has prevented a lot of young workers, who often have part time jobs, from qualifying because it is hard for them to accumulate the necessary number of required hours in this economic recessionary climate. 2) Increase benefits to 50 weeks in all regions, and a) Provide an additional year of Special Extension benefits if national unemployment exceeds 6.5% - paid from federal general revenues; b) Extend EI Part 1 benefits while a worker is in approved training. The number of weeks during which a worker may receive EI benefits also varies across the country depending on regional unemployment rates. The federal government recently extended the maximum number of weeks that workers may receive benefits by 5 weeks. In Peterborough, this had the effect of increasing the maximum benefit period from 45 weeks to 50 weeks. Depending on the region, the maximum benefit period can be as low as 43 weeks. 3) Increase the benefit rate to at least 60 % of insurable earnings, using workers 12 best weeks, and raise the maximum. Suspend the allocation of severance pay. Eliminate the 2-week waiting period. The benefit rate (the amount of money up to a maximum that eligible EI claimants can receive) has dropped steadily from a high of 72% of insurable earnings in the 1980 s to the current 55% as of The maximum weekly benefit has also dropped from $555 (today s dollars) in 1971 to the current $430 per week. The EI program has accumulated a huge surplus of $54 billion since the mid 1990s, the result of deep cuts in benefits paid to unemployed workers. That surplus could and should be available to backstop and improve benefits when we hit a recession. Now is the time to improve the EI system and make sure unemployed workers are not left out in the cold. The Peterborough and District Labour Council asks the city to support this resolution and encourage colleagues in neighbouring municipalities to also support this resolution.

3 A Short History of Jobless Benefits in Canada Provided by the Peterborough and District Labour Council 1930 s - One in five Canadians unemployed during the Great Depression Canada s first national unemployment insurance (UI) program is implemented, funded by the federal government, employers and employees Reforms to UI ensure that virtually all workers qualified after 8 weeks of insurable earnings. The benefit rate for unemployed workers with dependents set at 75% of insurable earnings to a maximum of $555 per week (today s dollars). More than 80% of unemployed able to collect benefits UI benefits drop to a standard 66% of insurable earnings to a maximum Variable entrance rates of insurable weeks introduced depending on regional unemployment Benefit rate reduced to 60%. Number of weeks required to qualify increased to weeks. A person with a period of unemployment in the previous year might have to have an additional 6 weeks to qualify s Shift in labour market to more part time work. During the recession of , 75% of unemployed are able to access regular UI benefits recession 83% of unemployed able to access regular benefits Federal government stops funding UI. Premium rates increase for employers and employees despite a severe recession. Most countries with a jobless benefit program use public funds as well as private contributions to fund the program. Exception: the US.

4 1993 Workers who quit or refuse suitable employment made ineligible for UI Benefit rate reduced to 55%. Minimum entrance requirements raised in regions with the highest unemployment The Unemployment Insurance program becomes the Employment Insurance program. The basis for calculating eligibility changes from number of insurable weeks to number of insurable hours. The number of hours required for eligibility increases from (the equivalent of) 300 hours to between 420 and 910 hours depending on regional unemployment. Requirement to pay premiums after the first 15 hours of employment changed to requirement to pay after the first hour. UI fund starts to produce large annual surpluses which are skimmed off to balance the federal budget. Number of unemployed receiving jobless benefits drops to 44%. November 2004 Auditor General reports EI fund surplus at $46 billion, more than three times the maximum reserve considered sufficient in Number of unemployed receiving jobless benefits drops to 41% and remains low. EI fund surplus hits $51 billion Federal government shifts responsibility for EI to a crown corporation with instructions to run the plan on a breakeven basis. October 2008 March 2009: Canadian economy loses 357,000 jobs. Ontario s unemployment rate reaches a 12-year high Duration of benefits for eligible unemployed extended by 5 weeks. Extension scheduled to expire September 11, 2010.

5 Some things to consider about our area s labour situation The labour force in the economic region of Muskoka-Kawarthas contracted from June 2008 to June Net employment fell by 9,100. Gains in part-time employment (+2,600) were more than offset by losses in full-time employment (-11,800). The labour force participation rate and the employment rate both declined. The number of unemployed rose by 2,600, pushing the unemployment rate up from 6.4% in June 2008 to 8.0% in June Over the same period, the provincial unemployment rate rose from 6.5% to 9.4% (Source: the Muskoka-Kawarthas Area Labour Market Monitor). For more information, please visit the Statistics Canada website at: For more information on the proposed Employment Insurance changes contact: Marion Burton, Peterborough & District Labour Council, A delegation will be present at the City of Peterborough Council meeting on August 10 at 7 p.m. The public is welcome to attend. For more information about our InfoNotes contact Dawn Berry Merriam at or dawnbm@pspc.on.ca. A United Way Member Agency