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Why the Atlantic Provinces are Concerned About EI

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The general buzz of activity on Parliament Hill may be in summer hibernation, but the effects of the last session are reverberating through the provinces. Premiers from all 13 provinces and territories are gathering in Halifax July 25-27 for the annual Council of the Federation meeting and will likely be discussing the impact of the omnibus budget bill C-38. Upcoming legislated changes to federal programs such as Employment Insurance, pose a strain to provincial resources -- a topic of particular concern to the Atlantic Provinces.

Generally the Council focuses on a number of issues such as the environment or healthcare -- and rightly so. Following the bomb that Finance Ministry Jim Flaherty dropped on the premiers in December 2011 (a cap on the Canada Health Transfer in 2016) provinces were left scrambling to have their voice heard and plan for a future with less funding for healthcare. An aging population and rising health costs may put this conversation at the forefront of the premiers' agenda, but the group would be remiss to ignore the opportunity to discuss the effect that new EI rules will have on the local economies.

Some argue that seasonal industries in the Atlantic Provinces, employing almost 20,000 people, are expected to be disproportionately affected. Workers in the shipbuilding, forestry, agriculture and fishing industries rely on the security of EI during the months work is not available. This has been the natural flow of employment for years. News of the changes to EI left Nova Scotia Premier Darrell Dexter, host of the upcoming Council of the Federation meeting, concerned that people will be pushed away from these critical industries causing them to suffer.

Other premiers in the Atlantic Provinces have also been openly critical of the changes noting that employees of seasonal industries will be unfairly targeted, as would individuals in rural locations -- two large segments of the regional population. In Nova Scotia alone, almost half of the population lives in rural regions where transit and employment opportunities are limited.

Diane Finley, Ministry of Human Resources and Skills Development, announced pending changes to EI in May of this year that will take effect in 2013. Changes target repeat users of the social insurance system, and will force individuals to accept jobs with lower pay (up to 70 per cent of their former paycheque) that are potentially an hour away from their home. Trying to assuage the concerns of local Nova Scotians on a recent visit in June, Minister Finley stated, "So we've got to take all those things into mind, but we're certainly not going to force someone to take a minimum wage job an hour away and expect them to pay for child care for two at the same time."

Kathy Dunderdale, Premier of Newfoundland and Labrador, noted last month that, "there's a real disconnect between Ottawa and the reality of people's lives." An hour's drive in a rural area is not the same as a train ride in an urban centre.

The Mowat Centre released a report this month that states that youth, urban centres and immigrant workers will be the groups predominantly affected by EI changes. This counters the concerns of Atlantic Canada, but does not fully ease fears as the report also states that most frequent users of EI are based in Newfoundland and Labrador, Nova Scotia and New Brunswick. Under the new rules, frequent users will be forced to take lower wage jobs sooner than other EI claimants. Low wages and unemployment can quickly pave a path to poverty. Without federal supports, provincial resources will be limited in the effect it can have on a social safety net.

Currently, unemployment in Nova Scotia increased 0.4 percentage points over May 2012 to 9.6 per cent (the national average is 7.2 per cent). The decline in May was due to a loss of full time jobs. While the labour force has grown, employment has not kept up with demand. In recent years there has also been a decrease in Nova Scotians accessing EI, a problem that is bound to increase in areas offering seasonal jobs.

Dignity for All -- the campaign for a poverty-free Canada recently wrote a letter to Premier Dexter in advance of the Council meetings to encourage the Premier to raise the issue with his colleagues. Acknowledging the negative impact that the Atlantic Provinces will experience, the campaign questioned whether the provinces could absorb the financial effects of the changes to EI, especially if more individuals turn to welfare.

If the goal of the budget, titled "Jobs, Growth and Long-Term Prosperity Act" is to increase the economic and social well-being of Canadians, then parliamentarians must consider the impact decisions will have on all segments of the population, including the poor. While EI is not meant to focus on poverty reduction, it acts as an important transition tool between employment and often catches people before hitting welfare, the social system of last resort.

Federal and provincial governments should work in tandem to develop appropriate responses to unemployment and low income issues. Forcing individuals to take home less pay is not what will help keep the economy moving or lift people out of poverty.