The Economic Action Plan supports Canadian workers who have lost their jobs or may face layoffs. The Employment Insurance (EI) program is responding to the increased unemployment rate. This year, an additional $5.8 billion will be paid out in EI benefits.
To leave more money in the hands of employers and employees, the Government has frozen EI premium rates for 2010 at $1.73, the same rate as 2009 and the lowest since 1982.
The Economic Action Plan is also providing additional benefits in 2009–10. So far, Economic Action Plan measures have provided:
Training measures are also in place to support Canadian workers and prepare them for the future:
Losing a job can be one of the most traumatic events in a person's life, affecting that person and his or her family. That is why Canada's Economic Action Plan includes $6.3 billion over two years to support workers affected by the global slowdown and create opportunities for workers through skills development.
In addition, as unemployment has risen, more Canadians are accessing EI benefits. Total EI support is now expected to be $5.8 billion higher this year than last year.
|(millions of dollars)|
|Strengthening benefits for Canadian workers||950||950||1,900|
|Enhancing the availability of training||940||965||1,905|
|Maintaining low Employment
|Total—Helping the Unemployed||2,708||3,546||6,254|
|Note: Totals may not add due to rounding.|
While the economic situation has been difficult worldwide, Canada's job market has been less affected than those in other countries. In sharp contrast to the situation in the United States, employment in Canada continued to increase over much of 2008. The relatively strong Canadian performance in 2008 was due to a number of factors, including the soundness of Canadian housing and financial markets, activity related to the recent commodity price boom, as well as the tax reductions introduced by the Government in the October 2007 Economic Statement, which took effect in January 2008, just as the U.S. was entering recession.
In 2009, the global recession has directly affected workers and their families. Employment in Canada has declined since October 2008, and the unemployment rate rose to 8.7 per cent in August 2009. Canadian workers and their families are directly feeling the impact of the economic decline and are increasingly relying on EI to provide support while they weather the economic situation and transition to new jobs.
The EI program has continued to respond to the changing labour market conditions, providing more benefits to Canadians. This year, the Government will spend approximately $5.8 billion more in EI benefits than last year, providing additional support to Canadians when they need it most. In addition, the Government has recognized the challenges faced by Canadians in these tough economic times, and under the Economic Action Plan the Government is making needed investments in training to help workers transition into new jobs.
While job losses have slowed in recent months, Canadians continue to need timely access to EI benefits. In areas where unemployment has risen, the program has automatically adjusted, lowering the eligibility criteria to qualify and extending the duration of EI benefits. Between October 2008 and September 2009, 82 per cent of Canadian workers had easier access to EI benefits and for longer periods of time.
In Kitchener, Ontario, where the unemployment rate rose to 9.9 per cent in August 2009 from 5.4 per cent in October 2008, the number of working hours required to receive EI fell by 140—from 700 to 560 hours.
The minimum benefit duration rose to 25 weeks from 14, which includes the extra 5 weeks of benefits provided by the Economic Action Plan.
At the same time, the maximum benefit period increased to 49 weeks from 36, including the extra 5 weeks provided by the Economic Action Plan.
As of September 2009, 38 of 58 regions have a lower eligibility requirement and higher duration of benefits than they did in October 2008. Eligibility requirements and benefit duration change in line with changes in local labour market conditions. Since the June report, labour market conditions have improved in four regions and deteriorated in one sufficient to change eligibility.
Canadians are counting on the Government to deliver their EI benefits in a timely manner, to answer their questions and concerns, and to resolve their problems efficiently and professionally. The Government has made the necessary investments to ensure Canadians receive their EI benefits as quickly and efficiently as possible.
As a result of these investments, more than 80 per cent of Canadians submitting new claims received their first cheques within 28 days. The Government will continue to monitor service standards and will ensure that Canadians continue to receive EI benefits in a timely manner.
The Economic Action Plan took quick and decisive action to support workers and families hardest hit by the global recession and resulting job losses with the creation of the Canada Skills and Transition Strategy. The strategy addresses the needs of Canadians affected by the recession while at the same time ensuring a more flexible, highly skilled workforce that will provide a competitive edge in the global economy of the future. The first element of the strategy focuses on providing significantly enhanced EI benefits and the second element focuses on enhancing the availability of training.
Extra Five Weeks of EI Regular Benefits: Canadian workers are now able to receive up to an extra five weeks of EI regular benefits. As of September, more than 300,000 claimants had benefited from up to five extra weeks of benefits at a cost of $446 million. An extra five weeks of benefits represents up to an additional $2,235 in EI benefits for an unemployed worker.
Enhanced Work-Sharing Flexibility: The work-sharing program is helping to preserve jobs that otherwise might have been lost. It provides support to thousands of employees by allowing them to continue working a reduced work week while they receive EI benefits for the days they do not work. It also allows business to keep their skilled workers engaged during the cyclical downturn. Since the Economic Action Plan initiative took effect in February, the number of job-sharing agreements has risen significantly and the number of Canadians participating in the program is up to more than 164,000.
Creative Connectors, a 16-person company in Vernon, British Columbia, ran into difficulty when it lost one of its biggest accounts a year and a half ago. Despite its best efforts, Creative Connectors faced the possibility of having to lay off some of its employees. Work-sharing is designed to avoid layoffs by offering Employment Insurance income benefits to qualifying workers willing to work a reduced work week while their employer recovers. Thanks to a work-sharing agreement reached for 11 workers, the company has been able to weather the storm and all 11 employees are still working and sharing the hours available. Work-sharing has enabled Creative Connectors to keep its workforce together.
"We have a pretty stable group of people here, and they don't want to leave any more than we want them to go."
—Lyle Enns, President and CEO, Creative Connectors
Standen's Limited, a 475-person company in Calgary, Alberta, has been in operation since the early 1920s. The company manufactures heat-treated alloy steel products, such as leaf springs, tillage tools, trailer axles and other specialty products used for heavy duty agriculture, transportation and light military vehicle applications. The business has an international market exporting to the United States, South America, Australia, New Zealand and China. Like many companies across Canada, the economic downturn had a negative impact on Standen's business. The company chose to apply for a work-sharing agreement to keep its workforce together.
"By keeping all our staff, we are able to keep our skills base. We focus on training and keeping our people to allow us to serve the customer better. If an order comes in, we can deliver it quickly."
—John Simpson, Director of Personnel
and Human Resources, Standen's Limited.
Support for Long-Tenured Workers: Many Canadians, especially in the manufacturing and forestry industries, who have worked for years, paying into EI but who have claimed very little, are now losing their jobs. To provide these workers with the support needed to retrain for a new job, possibly in an entirely different industry, the Economic Action Plan launched the Career Transition Assistance initiative. This initiative extends benefits for these workers up to a maximum duration of two years while they participate in longer-term training. In addition, workers who use their severance package to pay for training will have earlier access to EI benefits.
Service Canada has contacted long-tenured workers to notify them of their potential eligibility to participate in the initiative. The majority of these individuals are in hard hit regions such as southwestern Ontario, Montréal or northern Alberta. To date, thousands of Canadians are participating in long-term training programs—with additional intake expected in the fall.
More recently, the Government is taking steps to temporarily provide more weeks of EI regular benefits to long-tenured workers who have worked and paid EI premiums for a significant period of time, while making only limited use of the program. The Government has introduced legislation to extend regular benefits for eligible long-tenured workers by between 5 and 20 weeks, at a projected cost of $935 million, over the next 2 years.
Wage Earner Protection Program (WEPP): The WEPP's extended benefits took effect on January 27, 2009. Eligible workers are now provided guaranteed and timely payment of wages, severance, and termination and vacation pay owed if their employer becomes bankrupt and does not pay. Since January, over 8,800 WEPP claimants have received more than $18 million in WEPP payments, including for termination and severance.
The Government funds a wide range of training benefits and other labour market supports to help Canadians prepare for and find new employment. Canada's Economic Action Plan strengthened these benefits by providing $1.9 billion over two years for targeted investments aimed at developing a skilled, flexible and knowledgeable workforce. This builds on the $3.4 billion the Government has already injected into new training measures over the last four years.
Before the Economic Action Plan, the Government had already injected more than $3.4 billion in new funding for training measures. This has provided employees and employers with access to the skills and training they need to find a job, including increasing investments in apprentices, older workers, Aboriginal skills and employment, and training for those individuals who do not qualify for EI. This spending includes:
Enhanced Training: The Economic Action Plan is providing support to provinces and territories to address their particular priorities such as: supporting transition for workers, creating opportunities for employment, helping communities gain self-reliance, and supporting skills training, including workplace-based training. Agreements to deliver additional training have now been signed with all jurisdictions. These enhancements already provide incremental funding to support training for approximately 44,000 Canadians.
With these investments, there are more training opportunities available to help Canadians develop new skills and return to work through new programs such as: literacy and basic skills upgrading; wage subsidies and earnings supplements; skills enhancement and training; on-the-job training and workplace-based skills upgrading; and employment counselling.
Supporting Youth Employment: Young Canadians have been particularly affected by rising unemployment. The Economic Action Plan committed an additional $10 million in 2009–10 to the Canada Summer Jobs Program, bringing the total available funding for 2009–10 to over $100 million and helping employers, particularly in the not-for-profit sector, hire almost 40,000 students for the summer, of which approximately 3,700 are attributable to investments in the Action Plan.
Under the Economic Action Plan, an additional $10 million was provided in 2009–10 in support of the federal public service student employment program. As of September, 565 more students have been hired via existing federal work programs.
In addition, agreements have been finalized with the YMCA and YWCA to implement the new YMCA and YWCA Grant for Youth Internships, which will support the creation of up to 1,000 internships for Canadian youth in not-for-profit and community services organizations, with a focus on environmental projects. Funding is now flowing to the organizations to support such activities as participant selection and the internships themselves. Participants will develop valuable skills and knowledge that will assist them in integrating effectively into the labour market and/or assist them in making the choice to further their education.
Targeted Initiative for Older Workers (TIOW): Older workers in a large number of affected communities are being provided with additional support through the TIOW. The Economic Action Plan committed an additional $60 million over three years to the TIOW and expanded the scope to include a greater number of vulnerable cities with populations of less than 250,000. Since June, agreements with 11 provinces and territories have been finalized. To date, 38 projects have been approved, providing over 1,500 older workers in vulnerable communities across the country with access to employment activities such as learning assessments, skills training and help finding a job.
Apprenticeship Completion Grant: Changing demographics mean that the current shortages of skilled labour in certain parts of the country are expected to increase once the economy begins recovering. The Apprenticeship Completion Grant provides an additional incentive for young Canadians to finish their training and launch rewarding careers in the skilled trades by providing a $2,000 grant to those who complete their apprenticeship in a Red Seal trade. 4,329 grants have already been issued to eligible apprentices in such trades as construction and carpentry.
Aboriginal Skills and Training: The Economic Action Plan also provided support for Aboriginal Canadians by improving opportunities for training and skills development and creating jobs in their communities. All funding for 2009–10 has been committed.
The Aboriginal Skills and Employment Partnership initiative fosters partnerships between provincial and territorial governments, Aboriginal organizations and the private sector to create training and employment opportunities. Ten projects providing skills and training for Aboriginal Canadians have been approved. Work has begun to develop up to 10 additional projects.
The Aboriginal Skills and Training Strategic Investment Fund supports short-term, focused initiatives designed to help Aboriginal Canadians receive the specific training they require to benefit from employment opportunities, including those generated by the Economic Action Plan. The Fund will support over 70 projects that will begin in the fall.
The EI program provides needed support to those who have lost their jobs. During harder economic times, EI pays more benefits to more people, increasing the cost of the program.
As a stimulus measure, the Government has frozen EI premium rates for 2010 at $1.73, the same rate as 2009, and the lowest rate since 1982. This measure leaves more money in the hands of employers and employees. As the economy recovers, rates will be set by the Canada Employment Insurance Financing Board given their mandate defined in Budget 2008. Rates will only be raised to offset EI expenses over time.
|(millions of dollars)||(millions of dollars)|
|Strengthening Benefits for Canadian Workers|
|An extra five weeks of EI benefits||575||Yes||575|
|Wage Earner Protection Program||25||Yes||25|
|Enhancing the Availability of Training|
|EI training programs||500||Yes||500|
|Strategic Training and Transition Fund||250||Yes||250|
|Canada Summer Jobs Program||10||Yes||10|
|Federal public service student
|Targeted Initiative for Older Workers||20||Yes||18|
|Apprenticeship Completion Grant||40||Yes||40|
|Foreign Credential Recognition Program||25||Yes||25|
|Aboriginal Skills and Employment Partnerships||20||Yes||20|
|Aboriginal Skills and Training
|Aboriginal Human Resources
|Keeping Employment Insurance
rates frozen for 2010