EI reforms could provoke 'exodus' from rural areas

The federal government's Employment Insurance reforms could cause problems for many seasonal employers and spur on an exodus from rural New Brunswick, according to a document obtained by CBC News.

Premier David Alward told the potential loss of workers could hurt rural businesses

Premier David Alward was advised federal changes to the Employment Insurance program could cause an exodus out of rural communities. (CBC)

The federal government’s Employment Insurance reforms could cause problems for many seasonal employers and spur on a further exodus from rural New Brunswick, according to a briefing note prepared for Premier David Alward.

The June 28 briefing note, which was obtained by CBC News through the Right to Information Act, examined a series of different sectors, particularly those with high concentrations of seasonal work, that could be hurt by the federal government’s EI changes.

"The impacts of the EI reforms are likely to be even across all seasonal industries, and indeed, stakeholders’ concerns have been consistent across all sectors. A lack of timely, consistent information has led to a great uncertainty for all concerned in the season industries," the briefing note said.

The federal government introduced a series of changes to the Employment Insurance program, including a requirement for people to expand their job search and accept wages at 80 per cent of their previous wages, earlier this year.

Provincial civil servants advised the premier the stipulation could create a series of problems.

"Forcing workers into alternative employment during off-seasons may create an unstable business environment if they are unavailable to seasonal enterprises on resumption of production," the briefing note said.

"The resulting erosion of economic returns may induce a further exodus from rural areas."

The province's jobless rate rises significantly away from New Brunswick's urban centres. In the province’s largest cities, the unemployment rate stood at 8.9 per cent in February 2012, but that jumped to 10.8 per cent in small towns and 16.2 per cent in rural areas.

The latest census showed a continued migration from rural areas to urban centres.

The premier was advised that if seasonal workers are forced to leave their home communities to find work because of the EI changes, it could be even harder for the remaining companies to find workers.

"The potential loss of employees to other sectors or jurisdictions would pose a significant challenge for the long-term viability and growth of business and industries and disrupt supply chains," the document states.

Labour Minister Danny Soucy said the Alward government is asking the federal government to soften the changes to the program.

"We have a lot of seasonal workers, we have a lot of seasonal industry, and we want to make sure that all the people in the province are well-treated with the EI system," he said.

Soucy said he's expecting the federal government to loosen some of the new rules in the next few days.

Sectors studied closely

The team of civil servants also looked closely at the impact of the reforms on specific sectors. More than 40 per cent of seasonal workers have jobs in the manufacturing and construction sectors.

Other groups forwarded their concerns about the EI changes to the premier’s advisory group. Many of the industries shared similar concerns about an impact on rural communities.

The cultural and tourism sector expressed "grave concern for the potential loss of tourism seasonal staff."

Fisheries groups said there are currently 6,000 fishermen and crew members in the province and roughly 4,500 would be impacted by the changes.

Forestry groups were also worried about the loss of silviculture workers, who could leave rural areas to find work elsewhere. This could drive up costs for the forestry sector, the government was advised.

The premier was also told the impact of the EI reforms could have a "disproportionate effect on aboriginals."

Unemployment levels are higher on rural First Nations and people in those communities are more reliant on seasonal or part-time work. Alward was advised that "cultural sensitivity" would be necessary in applying the new EI reforms.

The federal government sent nearly $1 billion in EI benefits to New Brunswick in 2010, which is more than the roughly $780 million in EI benefits that came to the province in the three previous years.

Provincial officials advised Alward the document that a one-per-cent cut to the EI beneficiaries could be absorbed by the New Brunswick economy.

The civil servants also studied the impact of a deeper cut. The Department of Finance said a 10-per-cent cut to EI payments would cost the province 800 jobs by 2016 and $100 million in revenue.