EI claims surge in July on changes for areas hit by oil slump

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The number of Canadians receiving unemployment payments jumped in July after Ottawa extended benefits for regions suffering from the oil downturn.

The resource-dependent provinces of Alberta, Saskatchewan and Newfoundland and Labrador saw a spike in Employment Insurance recipients, which boosted the country's total number of recipients by 5 per cent to 575,160, according to Statistics Canada.

But Statscan cautioned against comparing the data to previous months as July was the first month Ottawa's EI changes went into effect. Part of the rise in numbers reflects unemployed workers who are again receiving EI payments after their original periods of benefits ran out.

Some of the federal government's measures are temporary, such as providing unemployed workers in 15 regions with additional EI payments. Other changes are permanent, such as making it easier for seasonal workers to access benefits and cutting the waiting period for payments.

The result was an increase in EI recipients in oil-producing provinces, as more unemployed workers qualified for benefits or extensions.

In Saskatchewan, EI beneficiaries rose to 19,980 from 14,240 last year. In Newfoundland and Labrador, EI recipients increased by a third to 40,280.

In Alberta, the number of people receiving EI payments rose to 99,320, a near-doubling from last year.

"That's 4 per cent of the labour force. The highest outside Atlantic Canada," said Trevor Tombe, assistant professor of economics at the University of Calgary.

Regardless of the abnormal July, the number of EI recipients in the oil-rich provinces has been steadily climbing since oil prices started tanking in mid-2014.

"The entire rise in EI beneficiaries in the past year has been concentrated in the three oil-producing provinces, while the rest of the country continues to chug along as if nothing has changed," said Douglas Porter, chief economist with Bank of Montreal.

In Ontario, the number of EI recipients fell 20 per cent to 125,040 over the past year. The number fell despite the fact that the temporary EI relief was also provided to Northern Ontario and Sudbury. Statscan said the largest decreases were seen in Oshawa, Kingston, Kitchener-Cambridge-Waterloo, Barrie and Guelph.

Nova Scotia and Quebec also recorded declines. Meanwhile the country's strongest economy, British Columbia, posted a small increase in recipients.

The data showed that overall EI claims rose by a third to 307,600 in July. That number included about 87,000 one-time automatic renewals related to the EI changes, according to the federal government.

Mr. Porter said the bigger issue was the underlying upward slope in claims. "It only began in late 2014 in the wake of the oil crash and continues to grind relentlessly higher," he said.

The temporary EI benefits, which began in July and are retroactive to January, 2015, were provided to 15 areas hurt by the commodities slump.

Those regions included all of Alberta, most of Saskatchewan, Sudbury, northern Manitoba and Nunavut.

Unemployment benefits were extended by five weeks to a maximum of 50 weeks from 45 weeks. For long-tenured workers, the cap was raised to 70 weeks from 50 weeks.

The regions were chosen based on the rise in unemployment rates as oil prices plummeted. Oil is now trading around $45 (U.S.) a barrel, compared with more than $100 two years ago.