Government of Canada extends Employment Insurance transitional measures

FREDERICTON, NB, April 9 /CNW Telbec/ - The Government of Canada is extending Employment Insurance (EI) transitional measures for parts of New-Brunswick and Quebec. The announcement was made today by the Honourable Keith Ashfield, Minister of National Revenue, Minister of the Atlantic Canada Opportunities Agency and Minister for the Atlantic Gateway and Senator Percy Mockler on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development.

"Our government is helping Canadians in these difficult economic times," said Minister Ashfield. "We are extending EI transitional measures in Madawaska-Charlotte and Lower Saint Lawrence and North Shore as the economy continues to recover."

The effect of EI transitional measures is to apply a higher unemployment rate than would otherwise be the case. As a result, claimants in the Madawaska-Charlotte region may require fewer hours to qualify for EI, and receive benefits for a longer period than would be the case without these measures.

The existing measures are being extended for 11 months, from April 11, 2010, to March 12, 2011. After March 12, 2011, the measures will be phased out gradually to ensure a smooth transition. In the event that the transitional measures have not concluded automatically before April 2012, they will end at that time. Following the conclusion of the measures, actual regional unemployment rates will be used to determine eligibility for EI benefits.

"Through Canada's Economic Action Plan, the Government is helping those hardest hit by the economic downturn by providing longer EI benefits, more efficient service and support for training, while protecting jobs through Work-Sharing agreements," said Senator Mockler.

The transitional measures provide further support to unemployed workers in addition to the temporary measures introduced in Canada's Economic Action Plan.

Further details on the EI transitional measures and the extension are available in the backgrounder.

This news release is available in alternative formats upon request.

    
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                                 backgrounder
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Under the Employment Insurance (EI) program, the EI economic regions ensure that people residing in areas of similar unemployment levels face comparable EI rules, in terms of eligibility and length of benefit entitlement. The current 58 EI economic regions came into effect on July 9, 2000.

The configuration of these economic regions had an effect that was greater than expected in the regions of Lower Saint Lawrence and North Shore in Quebec and Madawaska-Charlotte in New Brunswick. In response to the negative effects experienced by workers in these areas, transitional measures were temporarily adopted to spread the impacts of the new boundaries over an adjustment period.

The approach adopted was to use a blended unemployment rate, which is calculated by using the actual unemployment rate for the regions of Lower Saint Lawrence and North Shore and Madawaska-Charlotte and the unemployment rate for the adjacent EI economic region to which they belonged before the introduction of the new EI economic regions in July 2000, Gaspésie-Îles-de-la-Madeleine and Restigouche-Albert respectively. The effect of these measures is to apply a higher unemployment rate than would otherwise be the case. As a result, claimants in Lower Saint Lawrence and North Shore and Madawaska-Charlotte require fewer hours to qualify for EI, and receive benefits for a longer period than would be the case without the transitional measures.

The transitional measures, with extensions, have been in place since September 2000.

Today, the Government announced that the current transitional measures for the regions of Lower Saint Lawrence and North Shore and Madawaska-Charlotte are being extended for 11 months, from April 11, 2010, to March 12, 2011.

The current formula for calculating the transitional unemployment rate is 75 percent of the actual unemployment rate in the regions of Lower Saint Lawrence and North Shore and Madawaska-Charlotte and 25 percent of the unemployment rate in the adjacent regions of Gaspésie-Îles-de-la-Madeleine and Restigouche-Albert respectively.

After March 12, 2011, the measures will conclude automatically if they cease to have an impact on eligibility requirements and the duration of benefits, and the actual unemployment rate would apply from that point on. This would be the case if the actual and transitional unemployment rates are similar enough to require the same number of hours to qualify for EI, and provide the same duration of benefits.

On August 7, 2011, the weight of the actual unemployment rate used to calculate the transitional rate will increase to 85 percent.

On February 12, 2012, the weight of the actual unemployment rate will increase again to 95 percent, and the measures will end on April 7, 2012.

Following the conclusion of the measures, EI claimants will have their eligibility for EI regular benefits based on their actual regional unemployment rates.

For further information: (media only): Michelle Bakos, Press Secretary, Office of Minister Finley, [phone]; Media Relations Office, Human Resources and Skills Development Canada, [phone]