New employment insurance rules that divide P.E.I. into two EI regions will result in $1 million more in EI benefits paid to Islanders, but only those who live in rural areas will see gains from this increase.
That’s because payments for those in the Charlottetown area will be reduced by $14 million every year, while benefits for rural Islanders will increase by $15 million.
A regulatory impact analysis statement for the proposed EI changes was published in the Canada Gazette last Friday.
The cost-benefit statement shows the creation of two EI regions in P.E.I. will increase program costs by $1 million every year.
The Guardian erroneously reported online earlier today and in Monday’s edition of the paper those costs would be reduced by $1 million. The story also ran in the Journal Pioneer on Monday.
Costs for the federal government will, in fact, be increased under the P.E.I. employment changes.
“The Guardian story on April 14 incorrectly stated that (fewer) EI benefits will be paid to Prince Edward Island as a result of the creation of two EI regions. In fact, we expect that there will be $1 million more in EI benefits paid to Prince Edward Island as a result of these changes,” said Nick Koolsbergen, director of communications for federal Employment Minister Jason Kenney’s office. "More than 9,000 residents of Prince Edward Island are expected to see an increase in their EI benefits because of this change."
In February, the feds announced Prince Edward Island and the territories would soon be split into new employment insurance regions.
P.E.I. will go from being one EI region to having two EI zones — a capital region and a non-capital region.
This is being done to “reflect the difference in economic conditions between the capital area of Charlottetown and the non-urban areas of Prince Edward Island,” Koolsbergen said.
“This brings the same fairness to Islanders that is already the case in all other provinces in Canada.”
It has been known since the announcement the change would result in higher benefits for rural claimants.
The cost-benefit analysis released last week now attaches concrete numbers on how this will break down in P.E.I.
It estimates 9,150 EI claimants living outside Charlottetown would have had higher benefits if the changes had been implemented this year.
Meanwhile, 5,450 people in Charlottetown would have seen their benefits reduced.
The federal department estimates those in the Charlottetown region will see their total claims cut by $2,560.
The 9,150 rural Islanders getting a bump in EI payments will see an average total increase of $1,620.
This works out to a total estimated increase for residents of rural P.E.I. of close to $15 million every year.
Meanwhile, payments to EI claimants in the Charlottetown region will be reduced by a yearly total of about $14 million.
Charlottetown Mayor Clifford Lee did not mince words in his criticism of this reduction in benefits for capital city residents.
“It’s just cruelness,” he said Monday.
“I’ve said from day one this is bad public policy, it’s a conquer and divide approach and it’s really disappointing when this is what our national government has gotten to.”
He pointed to the fact the only federal riding not negatively affected by these changes is Egmont – currently represented by federal Fisheries Minister and Conservative MP Gail Shea.
Lee called this blatant patronage.
“The changes were made to the program in an attempt for the federal minister to bring something to her district,” Lee said.
“In order for her to improve the EI program for the people in her district, she had to take money from some other area… to say this is not politics, then can somebody please tell me how the city of Summerside becomes rural P.E.I. under these changes other than the fact the city of Summerside is in Minister Shea’s riding? It’s the only reason.”
The City of Charlottetown passed a resolution last month urging the federal government to reverse the EI changes.
Now Lee says the city is looking to form a coalition with ‘like-minded groups’ to help lend a unified voice in opposing the changes.
Stakeholders can provide comment on the proposed changes to EI regions for the next 30 days.
The changes are scheduled to come into effect on Oct. 12.