Vol. 147, No. 7 — March 27, 2013

Registration

SOR/2013-45 March 8, 2013

EMPLOYMENT INSURANCE ACT

Regulations Amending the Employment Insurance Regulations

P.C. 2013-286 March 7, 2013

RESOLUTION

The Canada Employment Insurance Commission, pursuant to section 54 (see footnote a) of the Employment Insurance Act (see footnote b), makes the annexed Regulations Amending the Employment Insurance Regulations.

February 4, 2013

IAN SHUGART
Chairperson
Canada Employment Insurance Commission
MARY-LOU DONNELLY
Commissioner (Workers)
Canada Employment Insurance Commission
JUDITH ANDREW
Commissioner (Employers)
Canada Employment Insurance Commission

His Excellency the Governor General in Council, on the recommendation of the Minister of Human Resources and Skills Development, pursuant to section 54 (see footnote c) of the Employment Insurance Act (see footnote d), approves the annexed Regulations Amending the Employment Insurance Regulations, made by the Canada Employment Insurance Commission.

REGULATIONS AMENDING THE EMPLOYMENT INSURANCE REGULATIONS

AMENDMENTS

1. The heading before section 12 of the Employment Insurance Regulations (see footnote 1) is replaced by the following:

HOURS THAT RELATE TO EMPLOYMENT IN THE LABOUR FORCE

2. Subsections 12(2) and (3) of the Regulations are replaced by the following:

(2) For the purposes of subsection (1), no week shall be taken into account if it has already been taken into account or if it coincides with a week of benefits paid.

3. Sections 24 to 24.2 of the Regulations are replaced by the following:

24. If a period of employment for which insurable earnings have been reported on the record of employment falls partially within a week that is included in the claimant’s qualifying period, the Commission shall, unless presented by the claimant or the employer with evidence of the amount of insurable earnings actually earned in the week, allocate the amount of insurable earnings, not including any insurable earnings paid or payable by reason of lay-off or separation from employment, proportionately over that period of employment, on the basis that the claimant earned the same amount of insurable earnings for each of the seven days of each week.

24.1 For the purposes of paragraph 14(3)(b) of the Act, the insurable earnings paid or payable to the claimant, during the qualifying period, by reason of lay-off or separation from employment is the lesser of

  • (a) the actual amount of those earnings, and
  • (b) the amount calculated in accordance with the following formula:
  • A × 0.18%
  • where
  • A is the claimant’s insurable earnings during the calculation
       period — not including those referred to in paragraph (a)—
       paid or payable for the employment that gave rise to the earnings
       referred to in that paragraph.

4. The heading before section 76.12 of the Regulations is replaced by the following:

Hours that Relate to Employment in the Labour Force

5. Subsection 76.12(2) of the Regulations is repealed.

COMING INTO FORCE

6. These Regulations come into force on April 7, 2013, but if they are registered after that day, they come into force on the Sunday after the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Background

In the 2012 Economic Action Plan (EAP), the Government of Canada announced the Variable Best Weeks (VBW) approach to align the calculation of Employment Insurance (EI) benefits amounts with local labour market conditions. This was part of a series of targeted, common-sense changes to make the EI program a more efficient program that is focused on job creation and opportunities.

Effective April 7, 2013, the benefit rate of claimants (excluding fishers and self-employed) will be calculated based on the highest weeks of insurable earnings out of the qualifying period (generally 52 weeks). The number of weeks used in the calculation will range from 14 to 22, depending on the monthly unemployment rate in each of the 58 EI economic regions. For example, a claimant in a region with an unemployment rate of 7% would apply the average weekly earnings of their best 21 of 52 weeks to establish their EI benefit rate. A claimant in a region with an unemployment rate of 14% would take the average weekly earnings of their best 14 of 52 weeks to establish their EI benefit rate.

This approach replaces the two previous benefit rate calculation methods in effect. Under the Employment Insurance Act (EI Act), a claimant’s benefit rate was calculated based on the number of weeks with insurable earnings within the rate calculation period (generally 26 weeks prior to claim), and subject to a minimum number of weeks required and dependent on the unemployment rate in the claimant’s EI region of residence. Under the Best 14 Weeks pilot project, available in 25 designated EI economic regions, a claimant’s EI benefit rate was calculated based on their highest 14 weeks of earnings within the qualifying period (generally 52 weeks prior to claim). The Best 14 Weeks pilot project concludes on April 6, 2013.

As part of the Government’s Jobs, Growth and Long-term Prosperity Act,the new national legislated EI benefit rate calculation received Royal Assent on June 29, 2012.

Issue

Amendments to the EI Act replace the “rate calculation period” — defined as 26 consecutive weeks in the qualifying period — by the “calculation period” — the number of highest weeks of earnings to use (between 14 to 22) over the qualifying period (typically 52 weeks). Consequential amendments are required to align the Employment Insurance Regulations (EI Regulations) with the EI Act by replacing the “rate calculation period” with the “calculation period.”

Objective

Align EI Regulations with specific amendments to the EI Act brought by the Government’s Jobs, Growth and Long-term Prosperity Act in June 2012 to ensure correct implementation of the VBW approach used to calculate a claimant’s EI benefit rate.

Description

Amendments to the EI Regulations replace any reference to the “rate calculation period” with “calculation period.” In addition, since the new calculation period consists of a number of weeks as opposed to a continuous period of time, amendments are being made to allocate pay period income to “weeks” to determine the weeks with the highest insurable earnings, which ultimately determine the calculation period referred to in the amendments to the EI Act.

With the rate calculation period concept eliminated, the EI Regulations require additional adjustments to align the treatment of insured separation money. Prior to the VBW calculation method, EI Regulations allowed the inclusion of insured separation money (vacation pay, payment in lieu of notice, etc.) paid or payable in the rate calculation period. The amount included was limited to the lesser of the actual amount of the insured separation money or 18% of total earnings in the rate calculation period. Amendments to the EI Regulations will provide that the amount of insured separation money to be included in the calculation of the benefit rate is the lesser of the actual amount of the insured separation money or 18% of the earnings in the calculation period (best weeks) from the employment that gave rise to the insured separation money.

The concept of “calculation period” creates redundancies with provisions in place: low-earning weeks (small weeks) and prescribed weeks are no longer relevant as the VBW approach relies on a specific number of highest insurable earnings weeks and have therefore been removed.

“One-for-One” Rule

The “One-for-One” Rule does not apply, as this consequential amendment does not impose any incremental administrative burden on business.

Small business lens

The small business lens does not apply to this consequential amendment, as this amendment does not impose any additional administrative or compliance costs on small business.

Rationale

Regulatory amendments align the EI Regulations with the legislative changes already made to allow for the coming into force of the VBW approach on April 7, 2013. Amendments ensure that the new benefit rate calculation meets the VBW policy intent.

There is no substantive impact related to the regulatory changes as they are consequential and technical amendments to align with the new legislation.

Implementation, enforcement and service standards

Existing implementation and enforcement mechanisms contained in Human Resources and Skills Development Canada’s adjudication and control procedures will ensure that these regulatory amendments are implemented effectively and efficiently.

Contact

Brian Hickey
Director
Employment Insurance Policy
Human Resources and Skills Development Canada
140 Promenade du Portage, Phase IV, 5th Floor
Gatineau, Quebec
K1A 0J9
Telephone: 819-934-4576
Fax: 819-934-6631