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employment insurance

Minister of Finance Jim Flaherty speaks with the media in the Foyer of the House of Commons in Ottawa, Ont. Thursday April 26, 2012.Adrian Wyld

The Conservative government says it's open to changes on Employment Insurance as some provinces warn Ottawa's reforms fail to consider factors such as aging populations.

Finance Minister Jim Flaherty acknowledged Friday that EI is "a very sensitive subject" and promised that any concerns about the new policies will be taken into account before they are put in place.

"We have open debate. We're having it now about this subject of EI and changes to EI," Mr. Flaherty told reporters in Oshawa. "It's a very sensitive subject in some parts of the country and I'm sure the debate will continue about what the definition of suitable employment ought to be, that kind of thing. People can express their views and of course they'll be taken into consideration."

Mr. Flaherty's comments come a day after his colleague, Human Resources Minister Diane Finley, provided a detailed outline of how Ottawa intends to rewrite the rules for EI. The rules will split EI recipients into three categories based on how often they've claimed EI in the past. Frequent users would be given just six weeks of EI to look for work in a similar occupation before they will be expected to take "any work" available, provided it pays at least 70 per cent of what their last job paid.

The changes are connected to the government's omnibus budget bill, C-38, but critics say that process doesn't allow for a thorough parliamentary study of the sweeping reforms.

A review of recent EI statistics shows that in Newfoundland and Labrador and Prince Edward Island, a strong majority of EI claimants are frequent claimants. The percentage for Newfoundland is 80 per cent – the highest in the country – followed by PEI (78 per cent), New Brunswick (60 per cent), Nova Scotia (56 per cent) and Quebec (43 per cent). The national average is 36 per cent.

Those percentages, based on data from the 2011 EI Monitoring and Assessment report, use a slightly broader definition of "frequent claimant" than the new one announced this week. The public report defines frequent claimants as individuals who had three or more active claims in the five years prior to their current claim. The new rules announced Thursday add to that definition by stating they must also have claimed 60 or more weeks of regular or fishing EI benefits in the past five years.

Federal data also shows that the number of annual frequent EI users in Canada has largely been steady at around 500,000, increasing only slightly during the recession.

"The incredible stability in the number of people who are always getting the benefits to me suggests that the labour market is just not adjusting like it should be," said University of Ottawa economics professor David Gray, who has studied EI extensively and supports the government's decision to create a frequent-user category.

Kathy Dunderdale, the Tory Premier of Newfoundland and Labrador, noted that many of her province's frequent EI users are older fishery workers that do not have the skills required to land some of the province's new resource jobs offered by employers such as Vale.

"They're looking for skilled labour. They're not looking for seasonal fish plant workers, who are also very skilled, but are older workers who joined the fishing industry at a very young age when there was a big drive on for labour supply," she said in an interview on CTV's Power Play, noting that many of these workers do not have a high school education or certified skills.

While she's concerned with the changes, the Premier suggested she doesn't see the point in challenging Prime Minister Stephen Harper in the style of her colourful predecessor, Danny Williams.

"That didn't work for us either," she said. "So that's some of the frustration we're feeling. If you vote for him, if you don't vote for him, if you don't talk to him, if you do talk to him, you know, the result almost seems to be the same."

Gary Ball, the owner of a St. John's repair shop called Car Fix, predicts his province's unemployment numbers will improve once that large generation of older fishermen retires.

"How do you take a person – 50, 55 years old – who did nothing in their life but be a fisherman and train them to work cash at the McDonald's or cash at Tim Hortons? It's not going to happen. Not very easily anyway."

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