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Vol. 137, No. 22 — October 22, 2003 Registration EMPLOYMENT INSURANCE ACT Regulations Amending the Employment Insurance RegulationsRESOLUTION The Canada Employment Insurance Commission pursuant to paragraph 54(x) of the Employment Insurance Act (see footnote a) , hereby makes the annexed Regulations Amending the Employment Insurance Regulations. September 18, 2003 P.C. 2003-1506 3 October, 2003 Her Excellency the Governor General in Council, on the recommendation of the Minister of Human Resources Development and the Treasury Board, pursuant to paragraph 54(x) of the Employment Insurance Act (see footnote b) , hereby approves the annexed Regulations Amending the Employment Insurance Regulations, made by the Canada Employment Insurance Commission. REGULATIONS AMENDING THE EMPLOYMENT INSURANCE REGULATIONS AMENDMENTS 1. (1) The portion of subsection 17.1(6) of the Employment Insurance Regulations (see footnote 1) before paragraph (a) is replaced by the following: (6) For the purposes of sections 7, 7.1, 12 and 14 and Part VIII of the Act, in respect of the period beginning on October 13, 2002 and ending on October 9, 2004, and in the case of a claimant who, during the week referred to in subsection 10(1) of the Act, was ordinarily resident in Madawaska—Charlotte, the applicable regional rate of unemployment is the greater of (2) The portion of subsection 17.1(7) of the Regulations before paragraph (a) is replaced by the following: (7) For the purposes of sections 7, 7.1 and 14 and Part VIII of the Act, in respect of the period beginning on October 13, 2002 and ending on October 9, 2004, and in the case of a claimant who, during the week referred to in subsection 10(1) of the Act, was ordinarily resident outside Canada and who was last employed in insurable employment in Canada in Madawaska—Charlotte, the applicable regional rate of unemployment is the greater of (3) The portion of subsection 17.1(12) of the Regulations before paragraph (a) is replaced by the following: (12) For the purposes of sections 7, 7.1, 12 and 14 and Part VIII of the Act, in respect of the period beginning on October 13, 2002 and ending on October 9, 2004, and in the case of a claimant who, during the week referred to in subsection 10(1) of the Act, was ordinarily resident in Lower St. Lawrence and North Shore, the applicable regional rate of unemployment is the greater of (4) The portion of subsection 17.1(13) of the Regulations before paragraph (a) is replaced by the following: (13) For the purposes of sections 7, 7.1 and 14 and Part VIII of the Act, in respect of the period beginning on October 13, 2002 and ending on October 9, 2004, and in the case of a claimant who, during the week referred to in subsection 10(1) of the Act, was ordinarily resident outside Canada and who was last employed in insurable employment in Canada in Lower St. Lawrence and North Shore, the applicable regional rate of unemployment is the greater of COMING INTO FORCE 2. These Regulations come into force on the day on which they are registered. REGULATORY IMPACT (This statement is not part of the Regulations.) Description The basic reason for the quinquennial review of Employment Insurance (EI) economic regions is to modify regional boundaries, where necessary, in response to changes in labour market conditions. The goal is to ensure continued equity and fairness in the application of the EI program in such a way that people living in regions with high unemployment rates would receive the financial help they need. The current EI economic regions were adopted in June 2000 and came into force on July 9, 2000 (SOR/2000-268). The changes were based on Statistics Canada data as well as other more recent labour market information. Experience following the adoption of the Regulations, coupled with further analysis, revealed that the introduction of the new economic regions had an impact that was greater than expected in two areas of the country: New Brunswick and eastern Quebec. The specific areas affected were the regions of Madawaska—Charlotte in New Brunswick and Lower St. Lawrence and North Shore in Quebec. Although the principles and rationale for the changes introduced in July 2000 are still valid, various factors resulted in people in the two affected areas being unable to adjust to the higher than expected increase in the number of hours needed to qualify for EI. This situation required a transitional measure to smooth out the adjustment period. The approach was a three-year transition using a regulation that averages blended unemployment rates from the new regions and the adjacent regions to which they belonged before the July 9, 2000 changes and uses the higher of the average or the actual rate. The transitional regulation was adopted in September 2000 (SOR/2000-355). A minor change was also made in April 2002 (SOR/2002-154) to match the dates of the Regulations with the planned release dates of Statistics Canada, which establishes the unemployment rates in the economic regions. Following the introduction of the transitional measures, some working committees were formed in the two regions concerned. With the participation of workers, employers and community groups, and Human Resources Development Canada (HRDC) officials, the committees tried to find new solutions to the problems of seasonal workers and to improve their employability. HRDC officials also started working with employers to try to extend the work season. The third year of the transition period began on October 13, 2002 and will end on October 11, 2003 (SOR/2002-154). After an evaluation of the situation in these two regions, it was found that the adjustment is more difficult than anticipated, particularly for seasonal workers. Therefore, they will need more time to adjust. The purpose of this change is to extend the transition period for these two EI economic regions. If the transition period were to end on October 11, 2003, the unemployment rate that would be used to establish a claim would be the actual rate provided by Statistics Canada. For these two regions, this would mean an increase in the number of hours of insurable employment required to qualify for EI benefits, a reduction in the number of weeks payable and, in some cases, a reduction of the weekly benefit rate caused by the increased divisor. As an example, for Madawaska—Charlotte in New Brunswick, during the period from May 11 to June 7, 2003, if the actual unemployment rate in force, 9.7 per cent, had been used, a claimant would have needed 560 hours of insurable employment to be able to establish a claim; the minimum number of weeks payable would have been 20 and the maximum, 44 weeks, depending on the number of hours worked. The minimum divisor used to calculate the benefit rate would have been 18. With the transitional rules, the unemployment rate used was 11.2 per cent. Therefore, the number of hours required to qualify was lowered to 490; the minimum number of weeks payable was increased to 23 and the maximum to 45. Finally, the divisor was lowered to 16. For Lower St. Lawrence and North Shore in Quebec, for the same period, if the actual unemployment rate in force, 11.3 per cent, had been used, a claimant would have needed 490 hours of insurable employment to be able to establish a claim; the minimum number of weeks payable would have been 23 and the maximum, 45 weeks, depending on the number of hours worked. The minimum divisor used to calculate the benefit rate would have been 16. With the transitional rules, the unemployment rate used was 13.0 per cent. Therefore, the number of hours required to qualify was lowered to 455; the minimum number of weeks payable was increased to 24 and the maximum was still 45. Finally, the divisor was lowered to 15. Because of the particular situation of these two regions, the transition period would be extended until October 9, 2004 to permit the workers and the employers to adjust to the labour market. Meanwhile, the Employment Insurance Commission (the Commission) will start to review the boundaries of economic regions all across Canada. Subsection 18(2) of the Regulations requires that the Commission review, at least once every five years, the boundaries used by Statistics Canada in relation to its labour force survey for the purpose of determining whether changes to the regions set forth in Schedule I of the Regulations are required. The last review took place in 2000 which led to the regulatory changes effective on July 9, 2000. Alternatives The only alternative is the status quo, which would mean that the actual unemployment rate provided by Statistics Canada would apply to these two regions effective October 12, 2003 with the impact previously described. Anticipated Impact Claimants in the affected areas will see no increase in the number of hours required to qualify for benefits and no decrease in the maximum number of weeks they can receive as compared to the third year of the transition period. The formula used to calculate the average of the unemployment rate will remain the same until October 9, 2004. Benefits and Costs The qualifying conditions and the duration of benefits will remain the same as calculated under the third year of the transition period. The estimated cost for this change is $8.7 million during the 2003-2004 fiscal year, and $10.3 million in 2004-2005. Funding will be taken from the EI Account. This estimate is sensitive to the unemployment rates used; that is, an increase in unemployment rates in these regions would reduce the cost of the extension. It is also estimated that there will be no administrative costs related to this change since the only change is the ending date of the transition period. Consultation Consultations have taken place with HRDC regional staff, local economists and local interest groups, through the local committees in both affected regions, since the implementation of the July 9, 2000 changes. There have also been consultations with citizens and their elected representatives in the affected areas. These amendments to the Regulations were prepared by Insurance Policy in collaboration with Strategic Policy, Legal Services, Insurance Program Services and Systems at HRDC National Headquarters and the Department of Justice. All parties involved support the attached proposal. These proposed amendments to the Regulations have also been approved by the Commission, which includes representatives of employers, employees and the government. Compliance and Enforcement The appropriate HRDC regional offices will be provided with detailed descriptions of the regulatory changes. The method for calculating the third year of transitional rates, which came into effect on October 13, 2002, will continue to be the basis for determining the unemployment rate in the region where each claimant lives. This will in turn determine the number of hours of insurable employment claimants need to qualify for EI benefits, the number of weeks of benefits they can potentially receive during the length of their claim, as well as the divisor to calculate the benefit rate. Existing compliance mechanisms contained in HRDC's adjudication and control procedures will ensure that the change is implemented properly. As required by the Regulations, the Commission will proceed in 2005 to its quinquennial review of the economic regions boundaries and determine whether any changes should be made according to Statistics Canada's labour force survey. Contact
Johanne Goyette
S.C. 1996, c. 23 S.C. 1996, c. 23 SOR/96-332 |
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