The CEIC may initiate pilot projects in order to assess the impact of changes to the EI program. These projects are often time-limited (often not exceeding three years), restricted in area of implementation (generally limited to a few specific regions) and usually involve regular benefits.[104]

A. Amendments to the “Working While on Claim” Pilot Project

A pilot project called “Working While on Claim” is currently underway. The goal of this pilot project is to encourage EI claimants to obtain employment and remain connected to the labour market. The pilot project, which increased the amount EI claimants can earn before this income is deducted from their weekly benefits, was first implemented in certain regions between 2005 and 2008. The pilot was then extended until 2012, and expanded across Canada. In August 2012, the pilot was extended again to August 2015, and the method for calculating the earnings allowed during the benefit period was changed. Because some claimants reported that the previous calculation method was better for some, the government allowed eligible claimants to choose between the former and current methods. In August 2015, the latest version of the pilot project was extended until 6 August 2016.[105] Budget 2016 proposes to extend the initiative to August 2018 in order to allow the government sufficient time to assess whether the program is meeting its objectives. The budget also proposes that claimants would be able to have the rules of the previous pilot applied to their claims, if they so wish.[106]

Paul Thompson, Senior Assistant Deputy Minister at ESDC, explained that the former rules allowed claimants to keep 100% of their earnings for a single day of work, but 0% thereafter. The more recent rules allow claimants to keep 50% of all their earnings. According to ESDC analyses, fewer claimants are working under the new rules (51%, compared with 55% under the old rules). However, those who work tend to work more days per week. He also noted that “low-income earners were overrepresented in the group that stopped working while on claim.”[107]

Ian MacPherson, President of the PEI Fishermen’s Association, observed that, under the new rules, the amounts clawed back from EI benefits because of employment income have increased. He stated that while his organization wants to encourage people to take advantage of opportunities to earn more income, the new pilot may result in more costs than benefits for fishers on PEI.[108]

In this regard, the PEI Coalition for Fair EI argued that “[t]he 2012 introduction of the Working While on Claim Pilot Project was devastating to many seasonal workers who are able to find only a few hours of work per week in their off-seasons. While these changes did benefit a small number of workers – those who have close to full-time work while they are on EI – they hurt the most vulnerable EI claimants.”[109]

The Coalition also noted that: “Although the latest budget changes have indicated that claimants will have the option of reverting back to the old rules for earnings while on claim, there are specific eligibility requirement[s] that must be met which greatly limit the number of claimants who can take advantage of the older pilot.” [110] For this organization, “there is no indication these eligibility criteria have been removed.”[111]

Despite some of these challenges, witnesses such as UNIFOR, indicated that the extension of the pilot project to 2018, including the option of using the rules under the previous pilot, is a step in the right direction. However, in its brief, UNIFOR added that “[t]he system must ensure that claimant elections are to the pilot that best serves their needs.”[112]

According to Public Service Alliance of Canada, the changes made to the pilot project in 2012 should be reversed. The union argues that the previous version of the pilot better helped low-income workers and recommends enhancing this version to enable workers to earn $100 per week or keep 50% of their weekly EI benefits with no clawback, instead of $75 or 40%.[113]

In testimony to the Committee regarding the “Working While on Claim” pilot project, the majority of witnesses suggested that the former rules were more favourable. The Committee appreciates the concerns raised and recommends as follows:

RECOMMENDATION 10

The Committee recommends that Employment and Social Development Canada take immediate steps to ensure that:

• during the extension period announced in Budget 2016, the choice between the current and previous versions of the “Working While on Claim” pilot project is completely free and not governed by specific eligibility criteria;
• the Government of Canada website and Service Canada agents provide the necessary information claimants need to choose the better of the two versions of the pilot project for their situation; and
• at the end of the extension period for the current pilot project in August 2018, a complete assessment of the pilot project be undertaken, the results shared with the Committee by February 2019, and made public.

B. End of the “Extended Employment Insurance Benefits” Pilot Project

In 2004, the federal government launched a pilot project that extended the maximum duration of benefits by five weeks in 24 regions of Canada with high unemployment rates (10% or higher) for a two-year period. The pilot was subsequently reintroduced with certain changes every two to three years until 2012.[114] The original goal of the pilot was to test whether additional weeks of benefits reduced the number of seasonal claimants who experienced an income gap – a period in which they receive neither EI benefits nor employment income.[115] The pilot was also implemented at the national level to boost the Canadian labour market to counteract the effects of the 2008–2009 recession.[116]

Budget 2016 announced a five-week extension of EI benefits for all eligible claimants in the 12 EI economic regions that have experienced the largest increases in unemployment owing to the recent economic shock caused by the decline in the price of oil.[117] On 13 May 2016, Prime Minister Justin Trudeau announced that three additional EI economic regions would qualify for the benefits extension: Edmonton, Southern Interior British Columbia and Southern Saskatchewan.[118]

With regard to the impact on seasonal workers of extending EI benefits by five weeks under the pilot project, the Committee was advised by ESDC officials that departmental analyses showed the pilot was poorly targeted. Specifically, Paul Thompson commented that while many of the additional weeks were used, “only a small share of the extra weeks … went to this targeted population. About 5% of the benefits paid went to these so-called seasonal gappers, which suggests that the measure as designed was not ideally targeted to the issue in hand.”[119]

Nonetheless, some witnesses underscored the negative impact that the termination of this pilot project has had on certain economically disadvantaged regions that are home to many seasonal workers. For example, Ian MacPherson of the PEI Fishermen’s Association told the Committee that, “from the fishing community standpoint … it was extremely beneficial in tiding people over to the start of the next season when they could go back to their seasonal job.”[120] In addition, Marie-Hélène Arruda stated that, in several regions of eastern Quebec – such as the Gaspé Peninsula and the Magdalen Islands – as well as in Atlantic Canada, people have absolutely no income between the end of their benefits and the next work season, a period some call the “black hole,” and these five weeks were virtually essential for them.[121]

A number of submissions to the Committee, such as the one from the Alberta Federation of Labour, recommend that the five-week extension of benefits announced in Budget 2016 not be limited to the regions most affected by the oil price collapse or those with chronically weak economies, but rather that this extension also be offered throughout the country. A number of labour representatives argued that “there is no justification for the EI Economic Regions approach, as an unemployed worker is an unemployed worker no matter where they happen to live.”[122]