Alberta and Saskatchewan are calling on Ottawa to explain why parts of their province are excluded from benefits to help workers hurt by low oil prices.
Under the federal government’s budget, Employment Insurance benefits will be temporarily extended by five to 20 weeks for a dozen regions devastated by the commodities slump, including most of Alberta, parts of Saskatchewan and Newfoundland and Labrador.
But other hard-hit areas did not make the list, such as Edmonton and its surroundings and Southern Saskatchewan, which includes oil-centric cities like Estevan.
“They have missed a big part of Saskatchewan’s oil patch,” Premier Brad Wall told reporters after Ottawa unveiled the budget. “The rest of our oil patch is in the southeast and southwest and it is excluded.”
To come up with a formula for extending benefits, the government identified regions across the country where the unemployment rate has soared over the past year as oil prices spiralled downward.
Ottawa’s budget documents stipulated that the jobless rate in the 12 areas increased by 2 percentage points or more for a sustained period between March, 2015 and February, 2016, compared with its lowest point between December, 2014 and February, 2015, without showing significant signs of recovery.
That formula has led to confusion. “There is a sense of subjectivity. What does ‘sustained’ mean precisely. What does ‘significant signs of recovery’ mean? Different reasonable cuts of the data would yield different regions,” said Trevor Tombe, assistant professor of economics at the University of Calgary. Mr. Tombe said he was not able to generate the same list of 12 regions.
For example, the Edmonton region’s jobless rate was just shy of the 2-percentage-point cutoff. Alberta has borne the brunt of the downturn, with the highest number of job losses since the recession in the early 1980s.
“I don’t know why there wasn’t the same support for Edmonton,” Alberta Finance Minister Joe Ceci told The Globe and Mail in an interview. Mr. Ceci, who lives part-time in Edmonton, said he has not been told specifically why this region was excluded.
Edmonton’s Chamber of Commerce said that many unemployed people will soon “be maxed out” of their benefits. “We would like a better explanation of what statistics the federal government uses and why we would be excluded,” Janet Riopel, president of the local chamber, said in a statement.
For the 12 regions, unemployment benefits will be extended by five weeks – from 45 to a maximum of 50 weeks. And for those who have contributed significantly to EI and have not extensively tapped benefits, maximum benefits will be raised from 50 weeks to 70 weeks.
The temporary measure will last roughly a year, beginning in July and be retroactive to January, 2015. The regions that made the list are: Newfoundland and Labrador, Sudbury, Northern Ontario, Northern Manitoba, Saskatoon, Northern Saskatchewan, Calgary, Northern Alberta, Southern Alberta, Northern British Columbia, Whitehorse and Nunavut.
Targeting regions in this way can create a sense of disparity among areas that are shut out. “It’s always a bit of a problem to draw lines,” said Michael Mendelson, senior scholar at the Caledon Institute of Social Policy, an Ottawa think tank. “If you are going to do regional adjustments that aren’t nationwide, you are always going to have that issue.”
Mr. Mendelson said ideally the rules should be the same across the country, with robust enough benefits that could deal with a sudden precipitous drop in employment in any region. “The whole concept of geographic definition is problematic, especially as we become more and more mobile,” he said.
The government was under immense pressure to help the unemployed workers and providing the additional benefits was one of its only measures, according to economists. Alberta and Newfoundland and Labrador are already on track to receive millions of dollars from a special fund to help provinces in dire economic needs. But they will continue to help other provinces provide services through equalization payments even though they are projecting massive budget deficits, because the formula for payments has already been set for the next few years.
Ottawa also reversed several of the previous Conservative government’s policies that made it more difficult for frequent EI users to qualify for benefits. Recipients will no longer be required to look for a job as far as an hour away and to accept jobs outside their field. And the waiting period for payments has been cut to one week from two weeks.
These changes were welcome in parts of Atlantic Canada, where the unemployment rate is higher than the national average and a good chunk of the labour force is seasonal.
The mayor of Sussex, N.B. said he understood Ottawa’s decision to pick the 12 regions, even though his city has suffered major job losses due to the closing of a nearby potash mine. “I actually like what I see,” said Marc Thorne, praising the measures that make it easier for seasonal workers to access benefits.
The Premier of Prince Edward Island also applauded the changes. “There are various ways in which the changes are being wound back that are going to be directly beneficial to people in the seasonal industry,” said Wade MacLauchlan. Nova Scotia’s Premier declined comment. The Premier of New Brunswick could not be reached for comment.
With a report from Jeffrey Jones and Justin Giovannetti in CalgaryReport Typo/Error