When the rules got tighter for unemployment insurance in 1993

Once their severance pay ran out, workers could no longer count on collecting UI until they found a job.

Workers who accepted an incentive to quit would no longer qualify

A contentious change to unemployment insurance

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28 years ago
Those who left work to take voluntary severance packages could no longer count on collecting UI under changes made in 1993. 2:59

Once their severance pay ran out, workers could no longer count on collecting UI until they found a job.

It was one of the biggest changes coming to Canada's unemployment insurance system in 1993 — that is, after Employment Minister Bernard Valcourt had backtracked on another proposal.

"There won't be any hotline for Canadians who anonymously want to turn in unemployment cheaters," said Pamela Wallin of CBC's Prime Time News on Feb. 11, 1993. She noted that criticism of the idea had come "fast and furious" after Valcourt floated it.

But the government wasn't backing away from another unemployment insurance measure.

An impact on early retirement

Benefits analyst Sherryl Smolkin said when companies offered packages to employees nearing retirement age, "they really don't feel they have a choice." (Prime Time News/CBC Archives)

The rules for collecting unemployment insurance were going to be tightened, explained social affairs reporter Karen Webb.

"Rather than simply lay workers off, an employer who needs fewer employees offers a cash deal to people who volunteer to quit," said Webb, outlining a common scenario over "the past five years."

Valcourt's new rules focused on a key word: volunteer.

"So, like anyone else who quits a job ... that means no UI," said Webb.

Employees 'penalized'

"The separations are at the employer's request," said Alberta premier Ralph Klein. "Therefore these people who want to take advantage of the severance package ought not to be penalized." (Prime Time News/CBC Archives)

Alberta Premier Ralph Klein, who had offered 1,000 provincial workers a package of benefits to leave, said he felt those employees were being "penalized" and called the federal government about it.

Elizabeth Maclean, who had accepted a deal from her employer the previous August, viewed UI as a "safety net" she could fall back on if she didn't find a job when her severance ran out.

"I felt it wasn't an outrageous thing to do," she said.

As Klein had found out, there was still time for those currently contemplating taking a deal, said Webb.

"Anyone who quits before the end of March will get unemployment insurance benefits," she said. "Even if the severance pay runs out much later."  

In 1996, according to the Globe and Mail, the federal government repositioned its plan for unemployed workers as Employment Insurance. 

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