In a critique of the Harper government’s policies, labour economist Andrew Jackson recently pointed out that “Well under one-half of Canada’s 1.5 million unemployed workers are collecting EI benefits today, even though the unemployment rate is still almost 8%. Special EI measures introduced as part of the 2009 Budget, notably an extra five weeks of benefits for all claimants, expired this fall, long before a real labour market recovery has taken place.”
The additional five weeks of EI benefitted 900,000 workers, and temporarily boosted the “B/U rate” (EI beneficiaries as a percentage of the unemployed) to a high of 51% during the summer of 2009. But the measure does not apply to claims filed after September 11, 2010.
Jackson notes that the October unemployment rate of 7.9% is down from the recession high of 8.6%, but still well above the pre-recession level of 6.0%. Little change is expected in the near future; the latest official Economic and Fiscal Update projected joblessness to average 7.7% in 2011, and 7.4% in 2012. TD Economics has forecast an 8.1% unemployment rate for 2011.
Meanwhile, the number of regular EI beneficiaries is falling as workers exhaust their benefits, and others fail to qualify for EI due to high requirements for hours worked. By August 2010, the proportion of all unemployed workers collecting regular EI benefits dropped from 51.3% to 44.4%, close to the pre-recession figure.
Less than one in three (32.0%) of unemployed Ontario workers received regular EI benefits in August, even though the Ontario unemployment rate is 8.6%, well above the national rate of 7.9% in October.
The federal government has announced that the Extended EI Benefit Pilot Project will be re‑instated for two years until September 2012. Effectively this restores the extra five weeks of benefits, but only for the 21 EI regions which had unemployment rates above 10% when the pilot project began in 2005. These 21 regions cover most of rural Atlantic Canada, rural Quebec and Northern Canada, where unemployment rates generally remain high.
Left out in the cold, says Jackson, are five EI regions which have unemployment rates above 10% today, mainly in hard‑hit industrial Ontario: Huron (10.5%); Windsor (11.5%); Niagara (10.4%); and Oshawa (10.1%.). Also excluded is the Southern Interior of BC (10.8%.)
As Jackson says, “the EI system has been dialled back to its pre recession parameters, which mean as little as 14 weeks of benefits for those who just manage to qualify. But nothing is being done to help the many workers who have exhausted their benefits in especially hard‑hit industrial Ontario.”
The “recovery” also masks a crucial shift in employment patterns. While the overall employment numbers in October have returned to the pre‑recession level, full‑time jobs remain 102,000 below the former peak, and the number of part-time workers has grown by 110,000. Total hours worked in the labour market fell steeply during the downturn (‑3.7%) and have since picked up, increasing by 2.9%. The number of hours worked in October 2010 remained 0.9% below the October 2008 level.