The Yukon's business community gave a thumbs-up Thursday to the territorial government's proposed changes to its social assistance program, although some say more can be done to help assistance recipients stay in the workforce.

"It's a progressive move for everybody if people are working," James Cackette, a manager at Liquidation World in Whitehorse, said Thursday. "I think it's a great thing, yes."

"Everybody's hunting for workers high and low. It's a very, very major problem for employers right now."

On Wednesday, Health and Social Services Minister Brad Cathers said he is proposing to raise social assistance rates by about 20 per cent, as well as offer financial incentives to encourage recipients to enter the workforce.

Cathers said the changes came from a comprehensive review of the territory's social assistance program. The government has to meet with federal authorities and First Nations before the changes can be implemented.

Social assistance rates have not changed in the Yukon for more than 15 years. Furthermore, Cathers said, nearly 70 per cent of recipients have been on social assistance more than once.

New workers face 'welfare wall'

In many cases, clients who find work end up back on assistance because they face what social service officials have dubbed the "welfare wall," in which the system claws back paycheques for the first three months of employment.

"Every dollar that they earn in the workforce is clawed back by the system for that three-month period, after which time they are allowed to retain $1 of every $4 earned," Cathers said Wednesday.

Cathers proposed eliminating the three-month clawback period, and allowing working assistance recipients to keep $2 out of every $4 earned, from the moment they start working.

People who stay employed could continue to collect benefits for up to three years, he added.

"We believe that by assisting these people for the three-year period, it will enable them to develop sufficient personal financial resources, that for many of them we may never see them again in social assistance," he said.

The proposed reforms are estimated to cost the Yukon government around $1.7 million a year.

Chamber head 'cautiously pleased'

Whitehorse Chamber of Commerce president Rick Karp said the changes may mean social assistance recipients can help alleviate the high demand for workers in the Yukon — a demand that could exceed 1,500 workers by spring, he said.

"We're cautiously pleased, because we don't think the government has quite gone far enough," he said.

He suggested the government remove the clawback altogether, allowing new workers to keep their full paycheques as well as their social assistance funding for the first three months of a job.

That way, he said, those workers would have time to adjust financially, making them more likely to stay in their jobs long-term.

Ross Findlater, a spokesman with the Yukon Anti-Poverty Coalition, called the reforms long overdue, but added the rate increase won't match the higher cost of living in the territory.

"It's certainly an improvement, but it certainly falls short of meeting the need — particularly in some of the communities with the high cost for everything, including food," Findlater said.

"So to 'up' them by 20 per cent isn't even keeping up over the 16-year period with the cost of living."

Foreign worker program changes announced

The government also announced changes to the Yukon Nominee Program, with the hopes of making it faster and easier for Yukon businesses to bring in foreign workers and meet staffing shortages.

Under the changes, Yukon employers will be able to nominate workers currently on temporary worker permits for permanent residency. The changes will let employers sponsor the best workers for permanent immigration.

While the final decision on whether a person can stay in Canada would ultimately rest with federal immigration officials, the process fast-tracks the Yukon's portion of the paperwork.

Previously, employers would bring entry-level immigrants who were eligible for a two-year temporary residency permit. In order to renew the permit, they had to leave Canada and re-apply from abroad.

The changes will be in place until March 2009, in order to provide time to assess their impact.

The program currently employs workers from Germany, France, China, the Philippines and India. Officials say that so far, it has attracted skilled and semi-skilled workers from around the world.