Human Resources and Skills Development Canada
www.hrsdc.gc.ca
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Fact Sheet - Support for Workers and the Unemployed
Through Canada’s Economic Action Plan, the Government of Canada proposes steps to temporarily provide additional support to workers and the unemployed facing transitions in tough economic times.
New in Canada's Economic Action Plan
- Provide nationally the benefits of the current five-week pilot project that until now has only been provided in regions with the highest unemployment rates and increase the maximum duration of benefits available under the EI program by five weeks, raising it from 45 to 50 weeks (at an estimated cost of $1.15 billion);
- Provide an estimated $500 million over two years to extend income benefits for long-tenured workers participating in longer-term training, with an estimated 40,000 workers expected to benefit, and allow earlier access to EI regular income benefits for workers purchasing their own training using all or part of their earnings resulting from a lay-off, such as severance pay;
- Provide an additional $1 billion over two years for provinces and territories through existing Labour Market Development Agreements for skills training;
- Extend Work-Sharing agreements to a maximum of 52 weeks for the next two years and increase access to Work-Sharing agreements through greater flexibility in the qualifying criteria, so more Canadians can continue working while companies experience a temporary slowdown and recover (at an estimated cost of $200 million); and
- Freeze EI rates for 2010 at $1.73 per $100—the same rate as 2009 and their lowest level since 1982, which is projected to provide a $4.5 billion stimulus relative to what would have been the case if rates had been raised to the break-even level over those two years.
Employment Insurance
The EI program exists to provide financial support to Canadians who have lost their jobs. This support adjusts quickly and automatically to changing regional unemployment rates. For example, a recently unemployed person could be eligible for a maximum of 38 weeks of benefits when the local unemployment rate is 6.5 per cent. This would rise to 42 weeks if the local unemployment rate rose to 8.5 per cent.
As announced in Canada’s Economic Action Plan, the Government will effectively make available nationally an enhanced version of the current five-week pilot project that until now has only been provided in regions with the highest unemployment rates.
This will provide claimants in regions not currently receiving additional EI benefits with five weeks of benefits. In addition, the maximum duration of benefits will be increased by five weeks in all EI regions, from 45 weeks to 50 (at an estimated cost of $1.15 billion). Some 400,000 claimants will benefit from this change in the first year.
Vignette – Extended Duration of EI Benefits
Suzanne is a worker in Oshawa who has recently been laid off from a full-time job she has held for over five years. In recent months, since the unemployment rate in Oshawa has been increasing, access to EI has automatically adjusted, with the number of hours needed to qualify declining and the duration of benefits increasing. At the current 7.7 per cent unemployment rate for Oshawa, Suzanne would have been eligible to receive a maximum of 40 weeks of EI benefits. Under the proposed temporary EI measures, Suzanne would receive five weeks of extended benefits. As a result, she would be eligible to receive a maximum of 45 weeks of EI benefits.
Long-Tenured Workers and Those with Separation Payments
Training and skills development are key to helping permanently laid-off workers, particularly those with many years of experience, who need to change occupations or sectors to find a new job. Through a pilot project to be implemented in collaboration with provinces and territories, EI income benefits will be extended for long-tenured workers pursuing longer-term training.
In addition, as proposed through Canada’s Economic Action Plan, workers with severance or other separation payments will now be eligible for earlier access to EI benefits, if they use some or all of that severance to purchase skills upgrading or training for themselves. Implementation of this measure will also require collaboration with provinces and territories.
Vignette – Long-Tenured Workers
David is 44 years old and has had the same job at a manufacturing plant for 20 years. The facility has recently closed, and David is now collecting EI benefits. Over the last 20 years, David has worked hard and only collected EI twice during his career. David will continue to be eligible for EI income support through Service Canada, but Service Canada will now identify him to his province as a long-tenured worker. Additional resources through Canada’s Economic Action Plan for Labour Market Development Agreements will help the Province provide David with a training program to gain new skills for a different occupation. In addition, the Province will ask Service Canada to extend David’s income support benefits, to cover the full length of his course and to ensure that he can finish his training and be in a good position to find new work. Additional support for long-tenured workers will help workers in sectors that were hit hard by the economic downturn.
Vignette – Separation Payments
Marc, a full-time worker in Windsor who was recently laid off from a highly specialized job of 15 years working in an auto plant, received the equivalent of 15 weeks of separation payments. Under the current EI program parameters, Marc is entitled to receive EI benefits 16 weeks after his lay-off. After four weeks of lay-off, Marc goes in to his provincial service provider and is informed that there is a course available for him if he can pay the tuition fees. While Marc feels that he needs this training, he is reluctant to purchase it since he cannot live for an extended period of time without income or any income support.
Now, Marc is told that he can purchase the training he wants to pursue using his separation payments, and, in return, he will receive his EI benefits earlier. Furthermore, Marc is told that he could also be entitled to additional weeks of EI benefits since he would qualify under the long-tenured worker pilot project. Marc accepts and, as a result, is able to start to receive EI benefits much sooner while still receiving valuable training to enhance his skills.
Labour Market Development Agreements
As announced in Canada’s Economic Action Plan, the Government intends to provide an additional temporary investment of $1 billion over two years through existing Labour Market Development Agreements (LMDAs) with provinces and territories. This will help respond to the higher demand for labour market programs and training, due to increased unemployment. This additional investment would respond to the demand for skills training, as well as the adjustment needs coming from EI clients. Under LMDAs, provinces and territories design and deliver the employment benefits and support measures to address their local needs.
Vignette – Labour Market Development Agreements
Julie is a 35-year-old woman who lost her job at a local restaurant. She has worked at the restaurant for over seven years and gained good employment experience. However, this job loss means that Julie will have trouble supporting her two young children. Canada’s Economic Action Plan provides for a $500 million increase to LMDAs to provide help to workers like Julie during the economic downturn. Provinces and territories will have significant additional resources for training programs and services that will enable individuals like Julie to upgrade their skills and find new sustainable employment. Programs such as the Targeted Wage Subsidy will allow Julie to gain valuable work experience in another field of employment that could lead to a new job.
Work-Sharing Program
Through Canada’s Economic Action Plan, the duration of Work-Sharing agreements will be extended by up to 14 weeks, to a maximum of 52 weeks, and access to Work-Sharing agreements will be increased through greater flexibility in the qualifying criteria, so more Canadians can continue working while companies experience a temporary slowdown and recover. This initiative will cost an estimated $200 million.
Vignette – Work-Sharing
Nancy has worked as a technician for 15 years in a manufacturing plant that makes automated systems for new trucks in southern Ontario. The plant recently had to cut back production due to the economic downturn that has hit the automotive sector particularly hard. Nancy’s employer, in order to retain skilled workers and avoid a temporary lay-off, has agreed to participate in Human Resources and Skills Development Canada’s Work-Sharing program while the plant is restructured. Nancy and her co-workers have been able to work three days a week in their regular jobs while collecting EI for the remainder of the week. With the temporary extension, this arrangement can last for up to 52 weeks while the company recovers.
