EI help to hard-hit regions tops $1B

OTTAWA • A federal program designed to give financial help to out-of-work Canadians in the hardest-hit economic regions of the country has blown past Liberal budget estimates with more than $1 billion in payouts.

The payments to date are double what the government anticipated it would spend to provide extra weeks of employment insurance benefits to workers in 15 regions smarting from a sharp downturn in energy prices.

When the plan was set up last year, the government initially estimated that 235,000 people would use the extra benefits.

By October, just over three months into the program, the take-up rate was almost half of forecast numbers.

Now, six months later, Employment and Social Development Canada says there have more than 267,000 claims for the extra weeks as of the middle of April, with benefits totalling almost $1.06 billion.

Last year’s budget and fall economic update estimated that benefit payments in the fiscal year that ended March 31 would be $557.3 million — about half of what was spent as of April 17 — and that overall spending between April 2016 and March 2018 would total $828.4 million.

“The fact that there were a larger number of people who took up the extended benefits does to me suggest that the labour markets evolved in a way that was weaker than expected,” said Trevor Tombe, an assistant professor of economics at the University of Calgary. “That’s the thing about forecasts. Things change.”

And there is still time for more workers to apply for the extra help, with the program’s cut-off set for Canada Day. The department said a report is coming in September with a revised cost for the program as part of the chief actuary’s review of EI premiums.

The Liberals unveiled the program last year to help workers in regions with stubborn unemployment rates. Eligible workers received an extra five weeks of regular benefits effective July 2016 but retroactive to January 2015. Long-tenured workers in the regions were eligible for an extra 20 weeks of benefits, to a maximum of 70 weeks.

Across all the regions, 190,183 workers received an extra five weeks of benefits, while 77,439 long-tenured workers qualified for the extra 20 weeks. They were, on average, using about eight weeks of extra benefits, although the department was unable to say how many exhausted their benefits.

Conservative critic Pierre Poilievre said figures suggest that the Liberals should change their policies, lower taxes and balance the budget.

“These numbers show that borrowing billions and hiking taxes have not created opportunity,” Poilievre, a former social development minister, said in a statement. “Rather, they have condemned hundreds of thousands of workers to unemployment.”