EI overhaul will extend benefits, shorten wait times

A long-rumoured overhaul to Canada's employment insurance regime is included in the budget, one that mighteven be more expansivethan what those who had lobbied for changes were expecting.

Ottawa plans to temporarily enhance benefits in some regions, granting up to 70 weeks of coverage to long-tenured employees in 12 regions identified as having particularly acute unemployment challenges, including energy-dependent parts of Western Canada, Northern Canada and Newfoundland and Labrador.

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And starting in July 2016, the threshold for the amount of hours a claimant has to have worked in order to be eligible will be lowered from its current level of 910 hours.

The new cut-off will vary across the country, but will bring the eligibility rules for new employees and those re-entering the workforce in line with other claimants in their region.

The government says the changes will make 50,000 more people eligible for EI thanunder the existing framework.

Starting next year, the wait time for benefits will be reduced, from two weeks to one.

"This means that when a worker loses their job and applies for employment insurance, they will be without income for a shorter period of time," Ottawa said.

There will be$73 million spenton improving call centres and streamliningthe customer service process of applying for and receiving EI.

Premiums fallmore than expected

A planned EI ratecut was revised slightly from the Liberals'election platform, moving the premium paid per $100 of an employee's income down to $1.61 starting in 2017. Premiums are currently $1.88 per $100 of earnings.

Prior to the budget, premiums were set to drop to $1.52, according to an adjustment mechanism brought in during previous Conservative government.

Officialssaid the higher rate would help pay for the EI extensions and eligibility changes announced Tuesday.

During the campaign, Justin Trudeausaid rates would be lowered to$1.65.

The slightly lower rate in the budget avoids effectively increasing the premiums paid by small businesses. Theycurrentlyreceivean EI credit, set to expire in 2017, that lowerstherate they pay on the employer's share of EI premiums, which is set automatically at 1.4 times the employee's premium.

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"All told, changes to the EI system will cost $602 million this coming fiscal year," Bank of Montreal said in a note to clients of the proposed EI changes.