When seasonal industries like tourism or fisheries form the economic backbone of a region, there often aren’t many jobs available for workers in the off-season. Seasonal jobs are a reality across the country, but some regions have a disproportionately high number of jobs that are seasonal in nature. This is the economic reality in those regions and not the fault of workers themselves. Employment Insurance is currently falling short for many of those workers, and it desperately needs to be updated.
Employment Insurance paid to workers in seasonal industries provides a stabilizing effect for these regions, buffering the ups and downs of seasonality for the whole local economy. It also ensures that highly skilled workers are available to return to work when the season reopens, keeping the industry viable.
An increasing number of workers in seasonal jobs are encountering something called the “black hole,” where they can’t piece together enough weeks of work and weeks of EI benefits to make it through the whole year. There are a number of reasons for this – for example, an increase in bad weather could disrupt the period when seasonal work would normally be available. However, the main reason is that the number of hours needed to qualify for benefits, and the number of weeks a worker can get in EI benefits depends directly on the unemployment rate in their EI region. The official unemployment rate across Canada has been trending down for years. This overall falling unemployment rate is not due to an increase in available jobs, especially not in the traditional off-season. The drop is largely because fewer people are looking for work, with students working less and a larger portion of the population retiring.
A pilot project was introduced in 2018 that provided a band-aid solution, offering five extra weeks of benefits to workers in targeted EI regions that were deemed dependent on seasonal industries. Since then, the unemployment rate in the 12 targeted regions in eastern Canada has dropped by nearly 3%. For the rest of Canada, the drop in unemployment over that same period was 1% on average.
Every percentage point drop in the regional unemployment rate means two fewer weeks of EI benefits for an unemployed worker and a longer period to qualify. If seasonal workers in targeted EI regions needed an additional five weeks of benefits in 2018 as per the pilot project, the 3% drop in unemployment since then means that, on average, they now need an additional six weeks on top of those 5 weeks to make up for the growing black hole.
Another factor is the design of the EI economic regions — some of the sub-regions where workers are most affected by the black hole are included in regions where the remainder of the region has a different economic profile. Advocates in these regions have been asking for review of EI boundaries for some time.
The federal government could solve these problems by reviewing the regional boundaries and increasing the number of extra weeks of EI benefits for seasonal workers from five to 15. The government could also change the rules for how EI treats workers when they change jobs. Currently, a worker that takes a risk on a new job could lose EI benefits if that job does not work out, if they are fired or they quit. Giving workers a grace period would allow them to try a new job to supplement their income with off-season work, or even take steps to transition out of seasonal work entirely, without the fear of losing their benefits. This would benefit workers, their local economies, and the EI system as a whole.