Vol. 134, No. 20 — May 13, 2000

Regulations Amending the Employment Insurance Regulations

Statutory Authority

Employment Insurance Act

Sponsoring Department

Department of Human Resources Development

REGULATORY IMPACT ANALYSIS STATEMENT

Description

The concept of regional differentiation was introduced into the Unemployment Insurance program in 1971, in recognition of the fact that the various regions of the country do not offer the same employment opportunities. Under this approach, entitlement to benefits depends upon the economic region in which an individual lives. Under the Employment Insurance Act (EI Act), that came into effect in 1996, both the number of hours of work a person needs to qualify for employment insurance (EI) and the duration of the benefit period depend on the unemployment rate in that region. The EI Act also provides for a minimum period of time over which earnings are averaged to determine the level of weekly insured earnings. This minimum period of time also depends on the regional unemployment rate. Subdividing the country into distinct and "homogeneous" labour markets is therefore necessary.

The unemployment rate for each EI region is determined monthly by Statistics Canada based on the Labour Force Survey. Entitlement is thus kept up to date on a continuous basis. The necessity of producing reliable unemployment rates requires that the EI regions be sufficiently large to allow valid estimates.

In the early 1970s, there were 16 regions. The number was increased to 48 in 1978, when the variable entrance requirements were introduced and increased again to 62 economic regions in 1990. In 1996, the number of EI regions was decreased to 54. They were determined following extensive and exhaustive studies of labour markets across Canada.

The current review stems from the fact that, while economic growth has reduced the unemployment rate to its lowest level since the late 1970s, a few areas of the country have instead seen a rise in unemployment since 1996. The review is also consistent with subsection 18(2) of the Employment Insurance Regulations, that requires that the review be carried out at least every five years.

The cornerstone of the reform of the unemployment insurance economic regions in 1990 was the rural/urban split. Census Metropolitan Areas (CMAs) set out by Statistics Canada represent areas that are roughly self-contained in terms of the labour market and as a consequence, every CMA in Canada is designated as a single "urban" region. Thereafter, rural EI regions are formed by grouping together those Census Divisions which are determined to constitute homogeneous labour markets.

Census Divisions represent counties, regional districts, regional municipalities and other types of provincially legislated areas. In Newfoundland, Manitoba, Saskatchewan and Alberta, provincial law does not provide for these administrative areas. Thus, census divisions were created by Statistics Canada in cooperation with these provinces for the dissemination of statistical data.

The basic reason for the review of EI economic regions is to modify regional boundaries, where necessary, in response to changes in labour market conditions. The goal is to ensure the continued equity and fairness of the EI program. The current review was based on detailed labour market data collected during the 1996 Census which was available in late 1998, as well as other more recent labour market information. This labour market data has been extensively analyzed to ensure that the proposed EI regions represent homogeneous labour markets.

Labour markets have changed since the present regional boundaries were set out in 1996. During the review process, modifications to boundaries are considered whenever labour market conditions in a region have sufficiently changed that the previous boundaries are no longer appropriate.

Under the proposal, there would be no changes in three provinces. In Newfoundland, Prince Edward Island and Manitoba, the existing EI regions are still representative of labour market conditions.

Proposed changes elsewhere would be:

In Nova Scotia, there would be three EI regions instead of five, by expanding the Eastern EI region slightly and merging the other three rural EI regions into a new Western Nova Scotia, to better reflect prevailing unemployment conditions in all areas — with Halifax unchanged as the province's urban EI region.

In New Brunswick, the single rural EI region would be split between new Eastern and Western EI regions, because the unemployment rate in Eastern New Brunswick is about twice as high as that in the Western part. The urban EI region of Fredericton—Moncton—Saint John would also have small changes.

In Quebec, the following changes would occur:

— Creation of the new EI region of Gaspésie—Îles-de-la-Madeleine, because unemployment in that region is about 20 percent.

— Creation of the new EI region of Bas-Saint-Laurent—Côte Nord, reflecting the similar labour market conditions in both areas.

— L'Islet, Montmagny and Les Etchemins: assigned to Bas-Saint-Laurent—Côte-Nord with comparable unemployment rates and income levels, instead of Quebec—Centre-Sud with the lowest unemployment rate in Quebec.

— Western Quebec: renamed as North Western Quebec due to the addition of nord du Québec (Census Division 99, ranging from James Bay to the Ungava), reflecting that area's ties to Western Quebec and similar unemployment.

— L'Amiante and Lotbinière: reallocated to Central Quebec instead of remaining with the low unemployment region of centre-sud du Québec, to reflect natural labour markets and similar unemployment.

— Acton: regrouped with the EI region of Central Quebec instead of with Montérégie, to reflect its similarity in terms of agricultural and manufacturing employment, as well as its comparable unemployment rate.

In Ontario, three changes are proposed:

— Kingston to become a new urban EI region, pursuant to its designation as a Census Metropolitan Area (CMA) by Statistics Canada.

— Bruce and Grey counties to move from South Central to Central Ontario, acknowledging their common characteristics and labour market conditions.

— Nipissing and Parry Sound districts to move from Central to Northern Ontario, because of similar unemployment conditions.

In Saskatchewan, Census Division No. 17 would be transferred to the Northern EI region instead of being within the Southern EI region, given its location and the fact that its unemployment situation is akin to that which exists in the North.

In Alberta, the existing rural EI region would be divided into Northern and Southern EI regions, since the unemployment rate in the North is 60 percent higher than in the South (about 9.5 percent compared to 6 percent).

In British Columbia, Abbotsford would become a new urban EI region, pursuant to its designation as a Census Metropolitan Area (CMA) by Statistics Canada.

Nunavut, the Northwest Territories and Yukon would each be constituted as separate EI regions instead of one, while keeping a deemed unemployment rate of 25 percent for each due to the lack of comprehensive unemployment data.

Alternatives

Two alternatives were considered.

One was to maintain the current EI regional boundaries. This option was rejected for reasons given in the previous section.

The other alternative was the proposal detailed above which would increase the number of economic regions from 54 to 58. It was felt that this approach would properly adjust the sensitivity of the EI program to regional economic differences, especially for the few areas which are still showing relatively high unemployment.

It should be noted that, due to the changes to the present regional boundaries, consequential amendments are required to Pilot Project No. 4 (small weeks). As a matter of consistency, it is proposed to adopt minor amendments expanding the "small weeks" treatment to the small areas which would join the EI regions eligible as a result of the amendments to the existing EI regional boundaries.

Benefits and Costs

Claimants in the areas where changes are proposed could face higher or lower entrance requirements, and longer or shorter EI benefit entitlement (lengths of claims), depending on the specific changes implemented.

The proposed amendments will lead to varying but generally offsetting impacts in most areas, a result consistent with one of the key aims of the review, which was overall cost neutrality. Those impacts may change over time with changing unemployment rates.

Consultation

Consultations with Statistics Canada and with Human Resources Development Canada (HRDC) regional and local economists have been conducted since the beginning of this review. Account has been taken of comments previously expressed by local citizens and by their elected representatives. Discussions with Statistics Canada indicated that it is appropriate to maintain the urban/rural split to meet the objective of defining relatively homogeneous labour markets for EI purposes. Pre-publication of these proposals was approved by the Employment Insurance Commission which includes representatives of employers, employees and the Government.

Compliance and Enforcement

All HRDC regional offices will be provided with detailed descriptions of the new regions. Automated search tools will allow HRDC staff to determine the EI region to which each claimant belongs, based on their place of residence. In cases where someone lives so near to the boundaries of more than one region that it cannot be determined with certainty in which region the claimant resides, the Regulations state that the area of highest unemployment shall apply.

Once these regions come into effect they will become the basis for determining the unemployment rate of the labour market area in which each individual EI claimant resides. These rates in turn will determine the number of weeks of insurable employment a claimant needs before he can qualify for EI as well as the number of weeks of benefits he can potentially receive during the length of the benefit claim.

Contact

Jacques Desmarais, Senior Policy Advisor, Policy and Legislation Development, Insurance Branch, Human Resources Development Canada, 140 Promenade du Portage, 9th Floor, Ottawa, Ontario K1A 0J9, (819) 994-8365 (Telephone), (819) 953-9381 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Canada Employment Insurance Commission, pursuant to paragraph 54(w) and section 109 of the Employment Insurance Act (see footnote a), proposes, subject to the approval of the Governor in Council, to make the annexed Regulations Amending the Employment Insurance Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Jacques Desmarais, Policy and Legislation Development, Insurance Branch, Human Resources Development Canada, 9th Floor, 140 Promenade du Portage, Ottawa, Ontario, K1A 0J9.

Ottawa, May 11, 2000

MARC O'SULLIVAN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE EMPLOYMENT INSURANCE REGULATIONS

AMENDMENTS

1. Paragraph 77.1(4)(a)(see footnote 1) of the Employment Insurance Regulations(see footnote 2) is replaced by the following:

(a) is a claimant in respect of whom a benefit period has been established under Part I of the Act on or after November 15, 1998 and who ordinarily resides in the region of Eastern Ontario, Kingston, Central Ontario, Niagara, Huron, Sudbury, Northern Ontario, Gaspésie—Îles-de-la-Madeleine, Quebec, Central Quebec, Trois-Rivières, Sherbrooke, Montreal, North Western Quebec, Hull, Lower Saint Lawrence and North Shore, Chicoutimi—Jonquière, Eastern Nova Scotia, Western Nova Scotia, Fredericton—Moncton—Saint John, Madawaska—Charlotte, Restigouche—Albert, Northern Manitoba, Southern Interior British Columbia, Southern Coastal British Columbia, Abbotsford, Northern British Columbia, Prince Edward Island, Northern Saskatchewan, St. John's, Newfoundland/Labrador, Yukon, the Northwest Territories or Nunavut as set out in Schedule I; and

2. (1) Subsections 2(2) and (3) of Schedule I to the Regulations are replaced by the following:

(1.1) The region of Kingston, consisting of the Census Agglomeration of Kingston.

(1.2) The region of Central Ontario, consisting of

(a) the portion of Census Division No. 11 that is not part of the Census Agglomeration of Kingston;

(b) the portion of Census Division No. 18 that is not part of the Census Metropolitan Area of Oshawa or the Census Metropolitan Area of Toronto;

(c) the portion of Census Division No. 43 that is not part of the Census Metropolitan Area of Toronto; and

(d) Census Division Nos. 12 to 16, 41, 42, 44 and 46.

(2) The region of Eastern Ontario, consisting of

(a) those portions of Census Division Nos. 2 and 7 that are not part of the Census Metropolitan Area of Ottawa-Hull;

(b) the portion of Census Division No. 10 that is not part of the Census Agglomeration of Kingston; and

(c) Census Division Nos. 1, 9 and 47.

(3) The region of Northern Ontario, consisting of

(a) those portions of Census Division Nos. 52 and 53 that are not part of the Census Metropolitan Area of Sudbury;

(b) the portion of Census Division No. 58 that is not part of the Census Metropolitan Area of Thunder Bay; and

(c) Census Division Nos. 48, 49, 51, 54, 56, 57, 59 and 60.

(2) Paragraph 2(13)(d) of Schedule I to the Regulations is replaced by the following:

(d) Census Division Nos. 23, 31, 32 and 40.

(3) Subsection 2(16) of Schedule I to the Regulations is repealed.

3. (1) Subsection 3(1) of Schedule I to the Regulations is replaced by the following:

3. (1) The region of Gaspésie-Îles-de-la-Madeleine, consisting of Census Division Nos. 1 to 8.

(2) Subsection 3(3) of Schedule I to the Regulations is replaced by the following:

(3) The region of Central Quebec, consisting of

(a) those portions of Census Division Nos. 21 and 22 that are not part of the Census Metropolitan Area of Quebec City;

(b) those portions of Census Division Nos. 37 and 38 that are not part of the Census Metropolitan Area of Trois-Rivières;

(c) those portions of Census Division Nos. 41, 42, 44 and 45 that are not part of the Census Metropolitan Area of Sherbrooke;

(d) those portions of Census Division Nos. 52, 60, 75 and 76 that are not part of the Census Metropolitan Area of Montreal;

(e) the portion of Census Division No. 82 that is not part of the Census Metropolitan Area of Ottawa-Hull; and

(f) Census Division Nos. 31 to 36, 39, 40, 48, 49, 50, 51, 53, 61, 62, 63, 77, 78, 80 and 90.

(3) Subsection 3(5) of Schedule I to the Regulations is replaced by the following:

(5) The region of South Central Quebec, consisting of

(a) those portions of Census Division Nos. 19 and 24 that are not part of the Census Metropolitan Area of Quebec City; and

(b) Census Division Nos. 26, 27, 29 and 30.

(4) Paragraph 3(7)(b) of Schedule I to the Regulations is replaced by the following:

(b) Census Division Nos. 46, 47, 54, 56, 68 and 69.

(5) Subsection 3(9) of Schedule I to the Regulations is replaced by the following:

(9) The region of North Western Quebec, consisting of Census Division Nos. 79, 83 to 89 and 99.

(6) Subsection 3(11) of Schedule I to the Regulations is replaced by the following:

(11) The region of Lower Saint Lawrence and North Shore, consisting of

(a) the portion of Census Division No. 94 that is not part of the Census Metropolitan Area of Chicoutimi—Jonquière; and

(b) Census Division Nos. 9 to 18, 28, 91, 92, 93, 95, 96, 97 and 98.

4. (1) Subsection 4(1) of Schedule I to the Regulations is replaced by the following:

4. (1) The region of Eastern Nova Scotia, consisting of

(a) Census Division Nos. 12 to 18; and

(b) the portion of Census Division No. 9 that is not part of the Census Metropolitan Area of Halifax.

(2) Subsection 4(3) of Schedule I to the Regulations is replaced by the following:

(3) The region of Western Nova Scotia, consisting of Census Division Nos. 1 to 8, 10 and 11.

(3) Subsections 4(4) and (5) of Schedule I to the Regulations are repealed.

5. Subsections 5(1) and (2) of Schedule I to the Regulations are replaced by the following:

5. (1) The region of Fredericton—Moncton—Saint John, consisting of

(a) Census Division Nos. 1 and 5;

(b) the portion of Census Division No. 2 that is part of the Census Metropolitan Area of Saint John;

(c) Census Subdivision Nos. 1303001, 1303004, 1303005, 1303006, 1303008, 1303011, 1303012, 1303013 and 1303016;

(d) the portion of Census Division No. 4 that is part of the Census Metropolitan Area of Saint John;

(e) the portion of Census Division No. 6 that is part of the Census Agglomeration of Moncton;

(f) Census Subdivision Nos. 1307019, 1307022, 1307028 and 1307045; and

(g) the portion of Census Division No. 10 that is part of the Census Agglomeration of Fredericton.

(2) The region of Madawaska—Charlotte, consisting of

(a) the portion of Census Division No. 2 that is not part of the Census Metropolitan Area of Saint John;

(b) Census Division Nos. 11, 12 and 13; and

(c) Census Subdivision Nos. 1310004, 1310005, 1310006, 1310007, 1310008, 1310011, 1310012, 1310013, 1310014, 1310016, 1310021, 1310024, 1310025 and 1310054.

(3) The region of Restigouche—Albert, consisting of

(a) Census Division Nos. 8, 9, 14 and 15;

(b) Census Subdivision Nos. 1303014 and 1303018;

(c) the portion of Census Division No. 4 that is not part of the Census Metropolitan Area of Saint John;

(d) the portion of Census Division No. 6 that is not part of the Census Agglomeration of Moncton;

(e) Census Subdivision Nos. 1307001, 1307002, 1307004, 1307005, 1307007, 1307008, 1307009, 1307011, 1307012, 1307013, 1307014, 1307016, 1307024, 1307029 and 1307052; and

(f) Census Subdivision Nos. 1310036 and 1310037.

6. (1) Paragraph 7(4)(b) of Schedule I to the Regulations is replaced by the following:

(b) the portion of Census Division No. 9 that is not part of the Census Agglomeration of Abbotsford; and

(c) Census Division Nos. 19, 21, 23, 25, 27, 29 and 31.

(2) Section 7 of Schedule I to the Regulations is amended by adding the following after subsection (4):

(4.1) The region of Abbotsford, consisting of the Census Agglomeration of Abbotsford.

7. (1) Paragraph 9(3)(d) of Schedule I to the Regulations is replaced by the following:

(d) Census Division Nos. 1 to 5, 7 to 10 and 13.

(2) Paragraph 9(4)(b) of Schedule I to the Regulations is replaced by the following:

(b) Census Division Nos. 14 to 18.

8. Subsection 10(3) of Schedule I to the Regulations is replaced by the following:

(3) The region of Southern Alberta, consisting of

(a) the portion of Census Division No. 6 that is not part of the Census Metropolitan Area of Calgary;

(b) those portions of Census Division Nos. 10 and 11 that are not part of the Census Metropolitan Area of Edmonton; and

(c) Census Division Nos. 1 to 5, 7, 8, 9, 14, 15, 18 and 19.

(4) The region of Northern Alberta, consisting of Census Division Nos. 12, 13, 16 and 17.

9. Section 12(see footnote 3) of Schedule I to the Regulations and the heading before it are replaced by the following:

Yukon

12. The region of Yukon, consisting of the Yukon Territory.

Northwest Territories

13. The region of the Northwest Territories, consisting of the Northwest Territories.

Nunavut

14. The region of Nunavut, consisting of Nunavut.

COMING INTO FORCE

10. These Regulations come into force on July 9, 2000.

[20-1-o]

Footnote a

S.C. 1996, c. 23

Footnote 1

SOR/2000-17

Footnote 2

SOR/96-332

Footnote 3

SOR/2000-17

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