Question Period Note: EI Modernization and Changes in the Labour Market

What are the timelines for EI Modernization?

• As Canada emerges from the pandemic, we are committed to building a modernized EI program that better aligns with the realities of the current and future labour market and workforce.

• The Government is consulting with Canadians on how to build an EI program that is simpler, fairer and better meets the needs of workers and employers.

• The Government will release its long-term plan on EI modernization once the consultations conclude in 2022, building on what we heard from stakeholders and Canadians on EI reforms and lessons learned from the pandemic.

• The intent is to build an EI program that is responsive to all labour market conditions, including in periods of low or high unemployment.

• It would be premature to speculate on the timing of this reform, as well as its content, at this time.

If pressed:

• Temporary measures put in place during the pandemic – including the suite of Canada Recovery Benefits and more flexible access to EI – provided necessary and timely support to millions of workers whose livelihoods were interrupted by COVID-19.

• These were critical to help our economy rebound quickly when restrictions lifted.

• Consultations are well underway. Phase 2 was launched on April 29, 2022, looking at issues related to the adequacy of EI benefits and sustainability of the EI program, while also taking a deeper dive into other key areas, such as seasonal work and supports for self-employed and gig workers. A report outlining what was heard during the first phase of consultations is also available online.

The temporary changes to EI that came into force on September 26, 2021 for a period of one year simplify and enhance access to EI benefits.

Consultations

Budget 2021 announced two-year consultations to inform the future, long-term reforms to EI.

The first phase of consultations with workers, employers, community organizations, academics, and other experts, launched in August 2021, and concluded on February 17, 2022. It gathered valuable input through multiple engagement avenues on a range of issues, including EI access and simplification, life events, workers in seasonal industries, self-employed and gig workers, and the Premium Reduction Program.

The second phase of consultations launched on April 29, 2022 and is open until end of July. It focuses on adequacy of benefits and EI financing, as well as examining in more detail issues requiring further consultation based on phase 1 results (e.g., supports for the self-employed and gig workers).

This includes a series of stakeholder roundtables as well as the opportunity for Canadians to provide written feedback and submissions by email, with additional information available on the EI Consultations portal.

Detailed Information on Budget 2021 Temporary Measures effective from September 26, 2021 to September 24, 2022

EI Entrance Requirements - Temporary Measure

Budget 2021 set a national entrance requirement of 420 hours of insurable employment to qualify for EI benefits while the job market continues to improve.

There are corresponding reductions of the earnings-based entrance requirements for fishing benefits ($2,500) and self-employed workers who opt in to special benefits ($5,289).

This measure is in effect until September 24, 2022.

Pre-COVID rules:
Under regular pre-COVID rules, the entrance requirement for regular benefits ranges from 420 to 700 hours depending on the regional rate of unemployment, and for all special benefits the entrance requirement is 600 hours.

Previous one-year EI temporary measure September 27, 2020-September 25, 2021)
• 420 hour entrance requirement for regular and special benefits with a one-time hours credit allowing workers to qualify with 120 hours of insurable employment.
• Reduced earnings-based entrance requirements for fishing benefits ($2,500) and self-employed workers who opt in to special benefits ($5,000).

Reasons for Separation - Temporary Measure

Under this temporary simplification measure, all of a claimant’s insurable hours and employment in their qualifying period count towards eligibility for EI, as long as the most recent job separation is through no fault of their own. It is intended to facilitate access to the EI program for multiple jobholders and part-time workers.

This measure is in effect until September 24, 2022.

Pre-COVID rules:
Under the EI Act any hours from a job where the job separation is not a valid reason (e.g., voluntary quit) cannot count towards the worker’s eligibility for EI (i.e. are not counted towards the 420 to 700 hour entrance requirement) or be used to calculate a claimant’s weekly benefit rate. Only hours and earnings since the invalid separation can be counted for determining eligibility, entitlement, and benefit rate.

September 27, 2020-September 25, 2021 temporary measure:
Only focused on reasons for separation in the 12 week window before a claim.

Monies on Separation - Temporary Measure

Under this temporary simplification measure, monies paid on job separation, such as severance pay and vacation pay, do not count as earnings for EI benefits purposes nor affect the timing of a claimant’s receipt of EI benefits. This enables claimants with monies paid on separation to receive EI benefits at the same time.

Monies on separation is the amount of money given to an employee following separation from their employment. This includes, for example, severance pay or accumulated vacation pay that is paid out upon the job separation.

This measure is in effect until September 24, 2022.

Pre-COVID rules:
Under the EI Regulations, monies paid to a claimant following separation from a job (i.e., severance, vacation pay) would result in a delay for the claimant receiving EI benefits because they were “allocated” to the weeks following a claimant’s separation. Claimants could not collect EI benefits until after their separation money allocation was exhausted.

Seasonal workers - Temporary Measure

Budget 2022 announced the extension of the parameters of the EI seasonal claimant pilot project that provides up to five additional weeks of benefits to EI-eligible seasonal workers in 13 regions, until October 2023. This will allow to conclude consultations, including on how best to support workers in seasonal industries, and develop a long term measure to support seasonal workers between work off season and ensuring that regions that depend on seasonal work have access to a ready workforce. Changes to the Employment Insurance Act to effect this change are contained in Budget Implementation, 2022, No.1, which was adopted by the House of Commons and is currently being considered by the Senate.

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