The Broadbent Blog

Getting the facts straight: EI changes hurt unemployed workers


In the last federal budget (Chapter 3.3), the federal government tried to sell its changes to Employment Insurance by describing how some hypothetical workers would benefit.

Unfortunately, the scenarios they chose were so unrealistic that most workers wouldn't recognize them. 

Instead, let's see how the changes that have been made impact real-world working Canadians.

Benefits based on best weeks

Susan is a municipal worker. She likes living in her rural community, and feels lucky to have her current job even though it is seasonal and her earnings are irregular and fluctuate from week to week. She often relies on EI to make ends meet while she is laid off. Her region has an unemployment rate between 8% and 9%. This means that the last time she was laid off she qualified for the Best 14 Weeks pilot, so her benefits were based on her best 14 weeks of earnings. Her benefit rate was $337 per week, $47 per week higher than it would have been without the pilot project. This year, with the new Variable Weeks pilot, her benefit is based on her best 19 weeks of earnings, which includes some weeks  of low earnings. Her benefit is now $305 per week. With public sector cut-backs, continued high unemployment, and high personal debt levels, Susan worries about the future for her small community. 

Working while on claim

Sandra worked for years at a large department store that recently closed and laid off all of their staff. She has a partner, and a daughter who is currently enrolled in a half-day kindergarten class. She files an EI claim, but feels confident that her years of experience will help her find another job quickly. Even with her job experience and an effective job search, the best that Sandra can find is a job that pays $12 per hour and offers only 10 hours per week. Her previous wage was $600 per week, so Sandra's EI benefit level is $330 per week. Under the old "Working While on Claim" rules, Sandra would have kept all of her part-time earnings while working on claim, and ended up with $450 per week. Under the new rules, Sandra will only be able to keep 50% of her earnings, or $60 per week. Since it will cost Sandra about $50 per week in gas, parking, and childcare, it no longer makes sense for her to take this part-time job. She continues her job search.

Frequent claimants

Steven makes $20 per hour in a manufacturing plant. Steven works hard. He has worked for several different employers in the industry over the past few years, and has been laid off by each employer at least once. Stephen doesn't like being laid off so often, but he's glad that EI is there when he needs it. He would like to retrain for a more stable job, but he can't afford to. This time when he gets laid off, he's classified as a Frequent Claimant. He must accept a similar job at 80% of his previous wage immediately. Stephen applies for all of the jobs that he finds through the Job Alert system and through his network of friends, but employers are unwilling to hire him because they know he'll return to his higher paying manufacturing job as soon as he can. After six weeks he must accept any job at $14 per hour (70% of his previous wage). A temporary staffing agency is aware that there are many workers who have been laid off from the plant, and takes advantage of this information to offer temporary jobs with low wages that workers such as Steven would not normally accept, but now are compelled to.

The government should come down from its ivory tower and see how its EI changes are hurting working Canadians. 

Angella MacEwen is the Senior Economist for the Canadian Labour Congress.