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This enactment brings together in a single statute under the name
``Employment Insurance'' provisions for income support and
employment assistance for eligible unemployed persons. Income
support is provided in a way that reinforces work. Employment
assistance helps maintain a sustainable employment insurance system
by helping unemployed persons to be productive participants in the
labour force.
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The changes to the employment insurance system in this enactment
constitute a comprehensive modernization of the system. They reform
many of the core features of the system, introduce a number of new
elements and make a number of technical amendments to improve
fairness, administration and compliance. The major changes phase in
over an extended period ending in 2001.
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The insurance system is changed from one based on weeks of work,
with a weekly minimum and maximum on insurance coverage, to a
system based on total earnings and total hours worked, starting from the
first dollar and first hour. The minimum requirement to qualify for
benefits is expressed in hours based on the national average work week
of 35 hours. This creates a system that better accommodates the variety
of work arrangements in today's labour market. It also permits
simplification of the reporting requirements for employers and of
premium collection, which is from the first dollar earned up to an annual
maximum. Workers with earnings below $2,000 have their premiums
refunded and there is a temporary partial premium refund for small
businesses that experience an increase in their premium payments of
over $500. Benefits are based on earnings over a variable reference
period of 16 to 20 weeks, depending on the regional rate of
unemployment.
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The maximum length of a claim for benefits is reduced to 45 weeks
and a new entrant or a re-entrant to the labour market is required to work
910 hours in order to be eligible for benefits. In addition to the existing
rules on allowable earnings, claimants are allowed to earn up to $50
each week without having their benefits reduced.
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There are three new features in the insurance system. The benefit rate
is reduced by up to five percentage points based on the number of weeks
of regular benefits a claimant has received in the past five years.
Similarly, for claimants who have higher incomes and have received
benefits in the past five years, their previous weeks of benefits increase
the amount of benefits they must repay through the tax system. For
claimants with children and low family incomes, there is a family
supplement which could raise their benefit rate to a maximum of 80%.
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This enactment also continues the National Employment Service
and authorizes the establishment of employment benefits, such as wage
subsidies or earnings supplements, in order to help eligible unemployed
persons get back to work. These provisions are subject to guidelines of
harmonization with provincial programs, reduction of dependence on
income support, co-operation and partnership with provincial
governments and others, flexibility and local decision-making, the
personal responsibility of the participants and evaluation of the success
of the employment benefits.
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This enactment commits the federal government to work in concert
with the provinces in designing, implementing and evaluating these
employment benefits. It provides for arrangements to be negotiated for
the administration by provinces of the employment benefits. It also
provides that the Government of Canada can make financial
contributions to similar provincial programs that are consistent with the
purposes and guidelines set out in this enactment. It specifies that
assistance for the provision of labour market training in a province
would be provided only with the agreement of the provincial
government.
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Premium revenues fund the employment benefits described above
for unemployed persons who are receiving or, within the past three
years, have been in receipt of income support under the insurance
provisions as well as persons who have received maternity or parental
benefits within the past five years.
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In light of the many significant changes contained in this enactment,
there is also a provision for monitoring and assessing how individuals,
communities and the economy are adjusting to the changes, including
the effectiveness of the employment benefits. A report on this
assessment is to be made to the Minister before December 31, 1998.
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