Sweeping EI changes usher in three new tiers of jobless workers

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The Conservative government is overhauling how Canadians collect employment insurance: pressuring frequent users to stop depending on the program as a yearly source of income and requiring those who rarely use it to look more broadly for jobs when they do collect EI.

Government officials are also making it clear that whether they be fishermen or farmhands, being a seasonal worker is not an acceptable reason for turning down available jobs.

Human Resources Minister Diane Finley outlined the biggest changes to the country's employment insurance rules in more than a decade on Thursday, creating three new tiers of unemployed workers. Canadians who fall into a new category of "frequent" users will be expected to take any available work after six weeks on EI, even if it means a pay cut of up to 30 per cent from their last job. Failure to do so will mean benefits are cut off.

"We're gearing a whole lot of different aspects of the EI system to helping Canadians get back to work faster," said Ms. Finley, who stressed that Canadians on EI will be receiving far more information in their inboxes about available jobs in their area.

The decision to treat EI recipients differently based on their past use of the program was widely praised by business groups and critics of a program that is sometimes derisively referred to as government "pogey." Yet labour groups and opposition MPs are fuming over the measures, arguing they will ultimately lead to more Canadians working in lower-paying jobs and being denied the insurance they've paid for. There is also strong reaction from political leaders in Atlantic Canada, where the percentage of EI recipients who are frequent users is much higher than the national average.

The response from Ontario and Quebec was lukewarm, while Alberta and Saskatchewan – where labour shortages are common – praised the announcement. "I think what we see from Ottawa is a solid first step," Rob Norris, Saskatchewan's Minister of Advanced Education, Employment and Immigration, said in an interview.

Some policy experts warned Thursday that while the initial focus was on the new rules for frequent EI users, the government is being too heavy-handed with unemployed Canadians who have little history of EI use.

Under existing rules, Canadians on EI could generally collect payments for up to 45 weeks while hunting for work in their field and pay level. Now there are firm time lines. Even infrequent EI users will have to broaden their search after as little as six weeks of focusing on jobs in their occupation.

"These are significant changes," said University of Toronto professor Matthew Mendelsohn, who is the director of the Mowat Centre that recently conducted a comprehensive study of EI. The rules also set a high bar to qualify for the most lenient EI tier of conditions – requiring at least seven years of work experience.

"It's a problem for the Canadian economy if we're not allowing people who have been trained to do a particular job sufficient time to find a job for which they've been trained," he said. "This is a big concern for young workers [and]new Canadians."

The Conservative government's omnibus budget bill, C-38, includes provisions that remove existing language from the Employment Insurance Act that outline circumstances in which an EI recipient can turn down a job as not suitable.

Thursday's announcement outlined what the new rules for suitable employment will look like when they are officially released as regulations after the budget bill is passed. Documents released Thursday say part of that definition will state that a suitable job is one that's within a one-hour commute but "could be longer in communities where longer commuting times are the norm." Officials pointed to Toronto as an example where long commutes are common.

NDP finance critic Peggy Nash said the scope of the EI changes, as outlined by Ms. Finley, underscore the fact that the government has included a wide range of major policy changes in the budget bill that should be separated and studied independently by Parliament.

"She's saying: 'Just trust us,' and I don't think Canadians trust this government," Ms. Nash said.

The new rules will create a sliding scale in which Canadians will be expected to broaden their search the longer they remain on EI.

"Long-tenured workers," defined as someone who received 35 or fewer weeks of EI over the last five years, will be allowed to restrict their job hunt to positions that pay 90 per cent of their previous earnings and are in the "same" occupation. After 18 weeks, they will be expected to accept jobs that pay 80 per cent of their previous salary in a "similar" occupation.

A second category called "occasional," defined as cases that fall between the definitions of long-tenured and frequent, can spend 18 weeks looking for a job in their "similar" occupation at 80 per cent of previous pay. Those recipients will then be expected to take "any work" that's at least 70 per cent of earnings. Fifty-eight per cent of claimants are occasional claimants.

The third category is called "frequent" users, defined as someone who has made three or more EI claims and collected 60 or more weeks of benefits in the past five years. Frequent recipients will only have six weeks to find a job in a "similar occupation" at 80 per cent of pay or more and will then have to take any work at 70 per cent of previous pay.

With reports from Jane Taber in Halifax, Rhéal Séguin in Quebec, Karen Howlett in Toronto and Josh Wingrove in Edmonton