The Canadian government is tightening its rules for employment insurance (EI) eligibility in the three Northern capitals of Yellowknife, Whitehorse and Iqaluit in order to bring them down to par with the rest of Canada.
The unemployment rate used to calculate EI benefits in the three territories has been set at 25 per cent since the 1970s, but Employment and Social Development Minister Jason Kenney says the actual rates are much lower, amounting to around 4 per cent in Yellowknife.
Kenney, who was in Yellowknife last Thursday to make the announcement, said the issue is about fairness.
“Yellowknife’s economy is strong; 4 per cent unemployment is a heck of a lot lower than Toronto and is even lower than in Calgary,” he said. “So it’s unfair that you would get access to benefits faster and longer than someone who lives in an area with higher unemployment, just because of some fiction from the 1970s.”
The new rules mean people in the city must have worked 700 hours in the previous 52 weeks, up from 420 hours, to collect employment insurance. Benefits will only be able to be collected for a maximum of 36 weeks instead of 45, effective Oct. 14 when the changes roll out.
The two-tiered system leaves out the rural areas of the territories, where unemployment sits at a current average of around 12 per cent in the NWT.
The department estimates regular claimants outside of Yellowknife will require 490 hours, or an additional two weeks of work, to access EI benefits. They will be entitled to between 23-45 weeks of EI benefits.
“This change recognizes that jobs and opportunities differ greatly between the capital regions and the more remote regions of each territory,” Jordan Sinclair, media spokesperson for Employment, told The Journal in an email.
Existing claims submitted before the implementation date will not be affected.
According to the NWT Bureau of Statistics, there were 1,900 unemployed people in the NWT in January 2014, with an overall unemployment rate of 8 per cent.
While the announcement has sparked worry that the changes could hold negative impacts for residents now struggling with the cost of living, Kenney said the federal government already gives “huge support” to the NWT.
“We do recognize a higher cost of living, which is why the federal per capitas to the territory are massively higher than anywhere else in every program…which includes federal support for income support delivered by the territorial government,” he said. “We give the territories more than anywhere else in the country, precisely to reflect the higher cost of living. But EI is a separate program.”
Kenney said he does not expect the changes to EI to negatively impact people’s lives.
“I don’t think this is going to very seriously affect people in this place because there are so many job opportunities available,” he said.
“I think this is positive. It shows our confidence in the growth of this region’s economy.”