Canada's Economic Action Plan

Canada's Economic Action Plan

April 30, 2012 12:30 ET

Government of Canada Improves Employment Insurance Program to Better Support Canadians and Address Local Labour Market Conditions

OTTAWA, ONTARIO--(Marketwire - April 30, 2012) - New measures were introduced last week in the Government's Jobs, Growth and Long-term Prosperity Act that highlight planned improvements to the Employment Insurance (EI) program.

"Our top priority is job creation, economic growth and Canada's long-term prosperity," said Minister Finley. "Our Government is introducing a new pan-Canadian approach for calculating EI benefits to ensure fairness, so that those living in regions with similar labour market conditions receive similar benefits."

The proposed changes will align the calculation of weekly benefits with the local labour market conditions in each region. This approach will be applied nationally and will be responsive to economic changes.

Specifically, the value of EI benefits will be calculated using the best (highest) weeks of earnings during the qualifying period (generally 52 weeks). The number of weeks used will range from 14 to 22, depending on the unemployment rate in the particular EI region.

Once implemented, the change will replace current legislation and the Best 14 Weeks pilot project, which is currently available in 25 regions.

"We will continue to ensure that the EI program remains fair, flexible and responsive so that it supports Canadians when they need it most," added Minister Finley.

Current EI rules will continue to apply until the new measure is implemented on April 7, 2013, subject to approval by Parliament. As a result, the Best 14 Weeks pilot project will be extended to April 6, 2013.

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This news release is available online at www.actionplan.gc.ca.

Backgrounder

Employment Insurance (EI) is Canada's largest labour market program, providing income replacement to help individuals and their families, as well as training and support to help Canadians return to work. Economic Action Plan 2012 announced improvements to the EI program to make EI more fair, efficient and responsive to regional economic conditions.

As part of this plan, the Government of Canada is investing $387 million over 2 years to improve the way EI benefits are calculated. The new Best Variable Weeks measure will reduce disincentives to taking all available work prior to being on EI. It will also increase regional fairness by ensuring that those living in areas with similar labour market conditions receive similar benefits.

Beginning April 7, 2013, the new approach will be applied across Canada, with all claimants having their EI benefit amount calculated based on the highest weeks of earnings over the previous year. The number of weeks used in the calculation will range from 14 to 22, depending on the unemployment rate in the particular EI region. The 2013 implementation timeline will ensure both claimants and Canadian businesses have sufficient time to adjust to the changes. The change will not affect benefits for the self-employed or fishers. During the transition period, benefit rates will be calculated based on EI rules currently in effect in each region.

As a result of the implementation timeline, the Government is extending the current Best 14 Weeks pilot project until April 6, 2013. This pilot, only available in some regions, calculates EI benefits based on a claimant's highest 14 weeks of insurable earnings in the qualifying period (generally 52 weeks prior to the claim). The new pan-Canadian approach will improve on the current pilot; enhancing fairness and flexibility by ensuring that Canadians in regions with similar unemployment rates will be treated the same.

Other measures proposed in Economic Action Plan 2012 include a new three-year national Working While on Claim pilot project and measures to connect Canadians to available jobs. For more information, visit servicecanada.gc.ca and follow the link to Employment.

Best Variable Weeks calculation rates

Regional unemployment rate Number of weeks used for calculation
6% or less 22
6.1% to 7% 21
7.1% to 8% 20
8.1% to 9% 19
9.1% to 10% 18
10.1% to 11% 17
11.1% to 12% 16
12.1% to 13% 15
13.1% or more 14

An example:

For example under the current system, Employment Insurance benefit rates are calculated differently for John in Abbotsford, B.C. and Mel in Windsor, Ontario, despite living in areas with similar unemployment rates (10.1% to 11%). Living in a non-pilot region, John's benefits are calculated based on his average income during the 26 weeks before he files a claim. Since Mel lives in a region participating in the current pilot project, his benefits are calculated based on his best 14 weeks over the past year. Under the new Best Variable Weeks calculation, both John and Mel will have their benefit rate calculated based on their best 17 weeks of income over the past year.

Contact Information

  • Alyson Queen
    Director of Communications
    Office of Minister Finley
    819-994-2482

    Media Relations Office
    Human Resources and Skills Development Canada
    819-994-5559