Cities Get the Cold Shoulder with EI Announcement
October 14, 2010, 4:50 PM EST
By Laurell Ritchie, CAW National Representative
The government's October 12 announcement that they will extend two EI pilot projects for eight more months ("Best 14 Weeks" and "40% Allowable Earnings") is welcome news for the many workers who find themselves in precarious employment. The government should move quickly to make them permanent features of the EI Act.
At the same time, too many workers are being left out in the cold.
People who live in Canada's most populous urban centres are being shut out from the five week EI extension also announced by the federal government on October 12. For those who are laid off, the cancellation of the five week extension could add up to a loss of $2,285.
This is no small matter. The vast majority of Canadians live in large urban centres.
This shutout is happening because the federal government chose to:
. End the five week extension that applied to claimants in all regions, as well as a provision that gave "long tenure" workers up to 20 extra weeks;
. Revert to an old formulation of the five week extension which applies to only 21 of 58 EI regions, the ones that met a 10% unemployment test back in 2005, mostly rural.
This makes no sense. A lot has happened since 2005. National unemployment rates were under 6% before the 2008 economic crisis and recession. Even bank economists now acknowledge it will likely be years before we see national unemployment rates of 6% again.
CAW has argued that extended EI benefits should apply to all regions and remain at least as long as the national unemployment rate is above 6%.
There was a time when 4% unemployment was considered high. During the 1980s the law required the federal government to help fund UI benefits when national unemployment exceeded 4% since a high national unemployment rate could not be explained by regional factors alone.
The first group of unemployed who now qualify for only 14 or 15 weeks will start running out of EI benefits right after Christmas in places like Halifax, Quebec City, Kingston, Regina and Winnipeg.
Cities excluded from the five week EI extension:
Halifax (Nova Scotia)
Fredericton, Moncton, Saint John (New Brunswick)
Quebec City, Montreal (Quebec)
Windsor, Oshawa, Toronto, London, Hamilton, Kitchener, Niagara, St. Catharines, Thunder Bay (Ontario)
Regina, Saskatoon (Saskatchewan)
Edmonton, Calgary (Alberta)
Vancouver, Victoria (B.C.)
The big manufacturing towns are still reeling from all the job losses that began in 2007. They will be excluded from the EI extension. That includes hard hit Windsor with unemployment in excess of 12% for most of 2010 as well as Oshawa still struggling with unemployment over 10%.
Metropolises like Toronto and Montreal with a large service sector have had unemployment in excess of 9% for most of 2010.
EI Regional unemployment rates are erratic and based on a "rolling" three month average. Southern Interior British Columbia was above 10%, fell below that during the summer but by October was back up over 10%. St. Catharines fell to 8.2% unemployment in July but climbed again to 9.7% in October.
The regional unemployment rate that determines EI entitlements at the start of your claim tells us nothing about unemployment levels in the months that follow, while you're looking for work. It can rise dramatically.
Since official unemployment rates exclude those who've given up looking for work because of a depressed job market, it's not unusual for unemployment rates to actually fall while layoffs and closures abound.
Regions Included in the 5 Week Extension which runs until September 15, 2012 (only 21of 58 regions):
2. St. John's
3. Prince Edward Island
4. Eastern Nova Scotia (excluding Halifax)
5. Western Nova Scotia
10. Central Quebec
11. North Western Quebec
12. Lower Saint Lawrence and North Shore
14. Northern Ontario
16. Northern Manitoba
17. Northern Saskatchewan
18. Northern B.C.
20 Northwest Territories