89-1E
LABOUR MARKET DEVELOPMENTS
Prepared by:
Kevin B. Kerr
Economics Division
Revised 28 July 2000
TABLE
OF CONTENTS
ISSUE
DEFINITION
BACKGROUND
AND ANALYSIS
A. Labour
Supply
B. Labour
Demand
C. Unemployment
D. Quarterly
Review (2nd Quarter 2000)
PARLIAMENTARY
ACTION
CHRONOLOGY
SELECTED
REFERENCES
LABOUR MARKET DEVELOPMENTS*
ISSUE
DEFINITION
Labour, the most widely
used and valued input in Canadian production, is exchanged in a market
best described as being in a constant state of flux. According to the
most recent data available, each year throughout the period 1990-1993
an average of 3.49 million workers were temporarily laid off and 2.5 million
were hired. Contrary to the widely held belief that economic structural
changes have increased the incidence of permanent layoffs, the average
risk of a permanent layoff in the early 1990s was similar to that in earlier
periods at the same point in the business cycle (see G. Picot and Z. Lin,
"Are Canadians More Likely to Lose Their Jobs in the 1990s?",
Canadian Economic Observer, September 1997).
Conditions in this market
throughout the last decade and the beginning of the 1990s were influenced
by a number of factors, including two major recessions, growth in non-standard
employment, rising skill requirements and an increase in the incidence
of long-term unemployment. These, and other developments in the labour
market that have occurred since the beginning of the last decade, are
the subject of this review.
BACKGROUND
AND ANALYSIS
The demand and supply of
labour in this country is measured officially by Statistics Canada in
its monthly Labour Force Survey, which involves approximately 52,000 representative
households across the country. This survey is usually conducted during
the week containing the 15th day (also known as the reference week). Although
the survey is intended to represent the population 15 years of age and
over, individuals residing in the Yukon and Northwest Territories, residents
of Indian reserves, full-time members of the Armed Forces and people living
in institutions are excluded. The supply of labour is measured by the
size of the labour force, including both employed and unemployed individuals.
The demand for labour is represented by the employed component of the
labour force.
The survey defines as employed
those who, during the reference week: did any work at all (work is defined
as any work for pay or profit conducted under an employer/employee relationship);
were self-employed (this includes those who did unpaid work related to
a family farm, or a business or professional practice owned or operated
by a family member); or had a job but were unable to work because of sickness,
family responsibilities, bad weather, labour dispute, vacation or some
other reason (not including waiting to be recalled or planning to start
work in the near future). It should be noted that this definition of "employed"
does not distinguish between various amounts of time spent working and
thus affords equal weight to full-time and part-time employment.
The survey defines as unemployed
those who, during the reference week: were without work, able to work
and had been looking for work in the past four weeks (including full-time
students looking for part-time work provided they do not report an unacceptable
reason for not taking a job); or were waiting to be recalled from a layoff
or expecting to start a new job in four weeks or less. The survey thus
generates data which present a static picture of the labour market. It
does not provide us with a dynamic perspective which, in any given month,
would differentiate between individuals who, for example, were employed
all month, unemployed all month, employed for part of the month and unemployed
for the rest of the month, were not in the labour force for part of the
month but employed for the rest of the month and so on.
A.
Labour Supply
Compared to the previous
decade, labour force growth in the 1990s has increasingly relied on net
immigration. Between 1991 and 1995, it is estimated that net immigration
contributed 1.5 times more to labour force growth than that witnessed
throughout the latter half of the 1980s (see F. Denton and B. Spencer,
"Population, Labour Force and Long-term Economic Growth," Policy
Options, January-February 1998). In addition, labour force growth
in the 1990s was considerably slower than in the previous decade, mainly
as a result of a decline in labour force participation. Throughout the
period 1990-1999, the aggregate participation rate declined by 1.5 percentage
points. Underlying this trend is the steady decline in labour force participation
among workers 15-24 years of age and workers 55 years of age and more.
As illustrated in Chart 1, the drop in the youth participation rate commenced
just prior to the onset of the 1990-91 recession. Since reaching a peak
of 70.6% in 1989, the youth participation rate declined steadily to 61.5%
in 1997, rising to 63.5% in 1999. While it is tempting to attribute this
trend exclusively to cyclical factors, there appears to be more than a
discouraged worker effect (i.e., unemployed individuals withdrawing from
the labour market because they believe that no jobs are available) underlying
this trend. According to a recent study, more than two-fifths of the decline
in the youth participation rate is attributed to an increase in school
enrolment (see Applied Research Bulletin, Human Resources Development
Canada, Vol. 3, No. 2, Summer-Fall 1997). Between 1989 and 1996, the proportion
of 15 to 24 year olds attending school increased by 8.8 percentage points
to 56.5%, an upward trend that is only partially attributed to cyclical
factors. Hence, even as the economy continues to grow, we can expect the
youth participation rate to remain below that witnessed before the turn
of the decade.
![Image161.gif (4473 bytes)](../images/891-e1.jpg)
Chart 1 also depicts a steady
decline in the participation rate among older workers. The decline in
labour force participation for this group is entirely attributed to the
decline in the participation rate of older men. Since the beginning of
the last decade, the participation rate among men 55 years of age and
over has dropped by 3.5 percentage points. This could be attributed to
two factors a trend toward intermittent participation or withdrawal
from the labour force altogether. According to a recent study, the latter
accounts for some three-quarters of the decline in the labour force participation
of older men (see D. Gower, "Men Retiring Early: How Are They Doing?,"
Perspectives, Winter 1995). A stronger economy, however, is expected
to draw some older workers back into the labour market, as evidenced by
the slight increase in this groups participation rate since 1996.
B.
Labour Demand
Not only has there been
less growth on the supply side, growth in the demand for labour has also
waned throughout the 1990s. Average annual employment growth during the
period 1990-1999 was almost one-half the annual rate in the 1980s. This
dramatic slowdown in job growth led some analysts to suggest that the
historical relationship between economic growth and the demand for labour
had been altered following the 1990-91 recession. Some even surmised that
Canada was experiencing jobless growth in the initial years of the recovery.
According to the data
underlying the 23-year period depicted in Chart 2, a 1% increase in aggregate
output produced an average increase of 0.77% in employment. Following
the onset of the last recession, this relationship appears to have weakened.
In 1992, aggregate employment declined despite the existence of a larger
economy. In addition, for each 1% increase in GDP during the period
1992-99, aggregate employment increased on average by only 0.39%; this
is 0.27 of a percentage point below the average increase in employment
witnessed in the seven years of economic recovery following the 1981-82
recession. According to recent research, one reason for the slowdown,
at least during the early part of this period, was excessive growth in
real wages. Between the 1st quarter of 1991 and the 4th
quarter of 1993, real wage growth outpaced productivity growth by some
1.5 percentage points. Higher UI, CPP and workers compensation levies
contributed to this situation. This research also concludes that the historical
relationship between output and employment has not changed since the beginning
of the decade (see P. Masse, Jobless Recovery: Is It Really Happening?,
Human Resources Development Canada, October 1995).
![Image163.gif (13281 bytes)](../images/891-e2.jpg)
While economic growth generated
mostly full-time and relatively stable jobs throughout much of the post-war
period, this is not the case today. There has been a decline in recent
years not only in the growth of full-time jobs, but also in their share
of overall employment. Compared to that of the previous decade, todays
workplace comprises proportionately higher levels of part-time, short-tenure
and contract jobs, collectively called non-standard employment. Self-employment,
which has become considerably more commonplace in todays labour
market, is included in this category. Throughout the period 1989-1999,
the number of self-employed workers increased by 36.6%, compared to a
7.9% increase in the number of paid employees. In other words, self-employment
accounted for 43% of total job growth throughout this period. (See Statistics
Canada, Labour Force Historical Review, 1999).
Despite the continued shift
toward non-standard employment, average weekly hours of work have remained
fairly stable since 1980. Underlying this apparent stability, however,
is a redistribution of these hours, as illustrated in Chart 3. Compared
to the beginning of the 1980s, proportionately fewer individuals currently
work a "standard" workweek. In 1999, roughly 25% of all workers
usually worked less than 35 hours per week, up by almost one-third from
1980; the proportion of workers with long hours remained similar in both
periods, although this was not the case in the mid-1990s where the proportion
of workers employed in long-hour weeks was somewhat higher.
![Image164.gif (12385 bytes)](../images/891-e3.jpg)
The growth in non-standard
employment has undoubtedly added flexibility to the workplace as it permits
firms to adjust their labour needs and costs more quickly and accommodate
workers who want to work outside the full-time regime. Some observers,
however, are concerned about the growth in non-standard work-time as some
of the new arrangements offer workers less job security, lower earnings,
and fewer benefits. It has been suggested that the trend toward non-standard
employment has contributed to a polarization of earnings (a widening gap
between low and high wage earners) in Canada. The diminished payback period
associated with short-tenure jobs could also discourage investments in
human capital and thereby increase structural unemployment.
Not only is the proportion
of labour used in the production of services continuing to increase, but
the demand for the skills inherent in this labour is also changing. Over
the years, the Canadian labour market has demanded higher skills and this
trend is expected to continue in the years ahead. Support for this view
is based, in part, on demand-side information generated by the Canadian
Occupational Projection System. Chart 4 presents the ten occupations that
are projected to grow the fastest during the period 1995-2000. Combined,
these occupations are expected to account for 20% of net new job growth
during this period. Approximately 20% of new jobs created during this
period are expected to require management skills, 20% are expected to
require a university degree, 20% will require a community college degree
and some 33% are expected to require a high school diploma. If supply-side
projections are incorporated into the analysis, labour market "tightening"
(shortage) is expected in 82% of management occupations and 73% of occupations
requiring a university degree (see W. Roth, Canadian Occupational Projection
System: A Presentation of Results Using a Revised Framework, Human
Resources Development Canada, 1995).
![Image165.gif (7651 bytes)](../images/891-e4.gif)
C.
Unemployment
With the onset of the 1990-91
recession, the steady decline in unemployment witnessed over the latter
half of the 1980s came to an abrupt halt. Throughout the period 1990 to
1992 the level of unemployment increased at an annual average rate of
15.8%, somewhat lower than the rate of increase in the corresponding three-year
period in the previous recession. Also, unlike the case in the previous
recession, Central Canada witnessed the largest relative increase in unemployment
during the 1990-91 recession and the early stages of recovery. Western
Canada, on the other hand, witnessed only two years of rising unemployment
(compared to four in the previous recession), after which the level of
joblessness began to fall. While the aggregate level of unemployment
has steadily declined since 1993, its level in 1999 was approximately
12% above the pre-recession level of 1989. When labour force growth during
this period is accounted for, the unemployment rate in 1999 was only 0.1
of a percentage point higher than in 1989.
Typically sensitive to downside
cyclical changes, economic decline usually exerts its greatest initial
impact on youth. In the early months of the 1981-82 and 1990-91 recessions
the demand for young workers plummeted and the rate of unemployment among
youth increased relative to that among adults. Although the relative
labour market position of youths improved during the 1980s and early 1990s,
this trend stopped in 1993; since that time, relative unemployment among
youths has steadily increased. In 1999, the youth/adult unemployment rate
ratio was 2.22, comparable to that found in the early 1980s.
During both the 1981-82
and 1990-91, recession, the relative position of women in the labour market
improved markedly. In 1982 and 1983, the annual average unemployment rate
of women expressed as a proportion of the rate for men was less than unity,
a situation contrary to that usually found elsewhere in the business cycle.
While this ratio exceeded one during the period 1983 to 1989, it dropped
below unity once again in 1990 and has remained equal to or less than
one ever since. In 1999, this ratio was equal to 0.94.
Although numerous important
developments have emerged in the labour market since the beginning of
the 1980s, many see the increase in long-term unemployment (i.e. unemployment
lasting 53 weeks or more) as particularly significant. As illustrated
in Chart 5, the burden of this increase appears to have fallen most heavily
on adults, especially men.
![wpe2C.jpg (49270 bytes)](../images/891-e5.jpg)
Statistics Canada reports
that, in 1980, 33,400 individuals, 3.8% of all unemployed workers, experienced
an unemployment spell lasting more than one year. Of these, 28% were youths,
24% were adult women and 48% were adult men. Since then, the incidence
of long-term unemployment has more than doubled, to 8.0% (95,500) individuals)
of all unemployed individuals in 1999. Its composition has changed dramatically;
in 1999 youth accounted for 9% of all long-term joblessness, while adult
women and men accounted for 33% and 58% respectively.
This distribution marks a major shift in long-term unemployment away from
youths to adults. The relative increase in long-duration unemployment
at the top of the business cycle also suggests that structural unemployment
has worsened since the beginning of the 1980s.
D.
Quarterly Review (2nd Quarter 2000)
As illustrated in Chart 6,
labour market conditions have continuously improved since the first quarter
of 1997. During this period, both the level and rate of unemployment declined
in each quarter. Over the last 14 quarters, the seasonally-adjusted level
of unemployment has declined by 420,300 individuals and the unemployment
rate has fallen by 3.2 percentage points.
![wpe2D.jpg (54613 bytes)](../images/891-e6.gif)
The labour force in the
second quarter of 2000 was slightly (0.25%) larger than in the previous
quarter. Throughout the same period, the demand for labour increased by
0.4% or 60,300 individuals. More than one-third of the increase in employment
during this period was attributed to growth in full-time jobs, a substantially
smaller contribution to overall employment growth than that found since
the last quarter of 1996. During this much longer period, growth in full-time
jobs has accounted for more than 90% of total employment growth, a result
that contrasts sharply with the long-term upward trend in non-standard
employment.
As illustrated in Chart 6,
the second quarter of 2000 marked the 14th consecutive quarterly
decline in seasonally-adjusted unemployment. Between the first and second
quarters of this year, the number of unemployed decreased by 18,500 (1.7%)
individuals. The regional distribution of this decrease was far from uniform,
with declines in Atlantic and Western Canada greatly exceeding that in
Central Canada. When changes in labour supply are considered, the rate
of joblessness between the first and second quarters of 2000 declined
from 11.4% to 10.8% in Atlantic Canada, from 6.7% to 6.6% in Central Canada,
and from 5.9% to 5.7% in Western Canada.
PARLIAMENTARY
ACTION
Although labour market legislation
seldom dominates the parliamentary agenda, a number of reforms to what
is now called Canadas Employment Insurance Program has given some
prominence to labour market issues in recent years.
Officially introduced
in 1989, Bill C-21 (An Act to amend the Unemployment Insurance Act and
the Employment and Immigration Department and Commission Act) did not
become law until October of the following year. This law paved the way
for a reallocation of $1.3 billion away from regular benefits to
enhance initiatives for the unemployed (e.g., training course purchases,
assistance for mobility and self-employment), a new special benefit structure
and an extension of UI coverage to those 65 years of age and over. Also
of great significance, Bill C-21 shifted the total cost of the UI to employers
and employees, thus bringing to an end government contributions to the
program.
On 26 February 1991,
the Minister of Finance tabled a budget that called for a further increase
in UI premiums in July 1991 and a $100 million cut in Canadian Jobs
Strategy (CJS) spending. A similar cut in CJS funding was announced in
the budget on 25 February 1992. In December of the same year, the
Minister of Finance announced that new tax incentives would be developed
and an additional $250 million would be spent over the next five years
to encourage more training in industry. In addition, the Minister also
announced that UI premiums in 1993 would be held at the 1992 level and
a premium holiday would be extended to small firms to stimulate the creation
of jobs. Moreover, the benefit rate would be lowered to 57% of average
weekly insurable earnings and voluntary quitters and individuals who had
lost their employment because of misconduct would be denied benefits.
Further changes to UI were
contained in the Budget Implementation Act, 1994 (Bill C-17).
Designed to reduce UI expenditures, these changes tightened the entrance
requirement in high unemployment regions; introduced a new and less generous
benefit structure and implemented a two-tiered benefit rate. In terms
of the benefit rate, claimants with dependants who earn less than or equal
to one-half of maximum weekly insurable earnings ($390 per week in 1994)
receive 60% of average insurable earnings, while the benefit rate for
all other claimants is 55%.
In 1994, the possibility
of a major UI reform surfaced when the federal government launched its
review of Canadas social programs. While some of the legislative
changes in Bill C -12 (An Act respecting employment insurance in Canada),
adopted in June 1996, mark a new approach, the primary structure of the
new program remains essentially unchanged. For example, the old weeks-based
approach for determining benefit eligibility and duration is now based
on hours (assuming a standard work week of 35 hours). Weekly benefits
are now determined by averaging insurable earnings over a fixed, consecutive
period of time (including weeks without earnings) known as the "rate
calculation period." While the weekly benefit rate remains at 55%,
this rate could decline by as much as five percentage points, depending
on an individuals claim history. In terms of income redistribution,
the new law provides an income supplement to claimants who have children
and a low family income. Moreover, the existing benefit repayment provision
has been significantly strengthened by lowering the income threshold at
which benefits are repaid as well as raising clawback rates according
to an individuals claim history. While claimants may continue to
earn up to 25% of weekly benefits without experiencing a reduction in
their benefits, low income claimants (i.e. those receiving weekly benefits
below $200) are now entitled to an earnings exemption of up to $50 per
week.
The new insurance system
permits the program to generate and maintain surplus revenues. This measure
is intended to minimize fluctuations in premium rates over the business
cycle. According to the Main Estimates, the cumulative surplus in the
EI Account is expected to reach $19.6 billion in 1998-99. This is well
above the upper limit of $15 billion that the Chief Actuary of the EI
Account deemed sufficient to meet the objectives of section 66 of
the Employment Insurance Act.
The reconfigured insurance
system also provides financial assistance grants, contributions,
loans and vouchers under employment benefits (previously known
as UI developmental uses). Eligibility for these benefits includes
those who are eligible for unemployment benefits, those who have received
regular benefits in the past three years and those who have received maternity
or parental benefits in the past five years. As in the case of the UI
reform in 1990, the government intends to redirect some program savings
to employment benefits. On 30 May 1996, the Minister of Human Resources
Development offered provincial and territorial governments the opportunity
to assume responsibility for the labour market measures underlying employment
benefits. To date, nine provinces and both territories have signed labour
market development agreements with the federal government. Ontario is
the only province that has not yet done so.
There are basically two
types of agreement. Under one type, a province/territory assumes responsibility
for administering Part II benefits. Under the other type, the federal
government continues to deliver Part II benefits and co-manages program
design with the province/territory. Of the 11 agreements signed to date,
six involve provincial/territorial responsibility for the design and delivery
of Part II benefits.
CHRONOLOGY
23 October 1990 - Bill C-21
received Royal Assent, thus paving the way for the government to implement
its Labour Force Development Strategy.
26 February 1991 - In the
budget, the Minister of Finance announced the government's Expenditure
Control Plan, part of which called for a $100 million cut in Canadian
Jobs Strategy expenditures in 1991-92 and a 24.4% increase in UI premiums
in July of 1991.
29 October 1991 - The Ministers
of Industry, Science and Technology and Employment and Immigration jointly
announced the Prosperity Initiative. This initiative is a comprehensive
consultation process designed to establish measures for enhancing Canada's
international competitiveness. One aspect of this exercise that is expected
to receive a great deal of attention is human resource development, especially
in regard to basic education and enterprise-based training.
25 February 1992 - The Minister
of Finance announced in his budget that CJS expenditures would be cut
by $100 million in 1992-93. While this was more than offset by an increase
in UI developmental expenditures, it will probably have an adverse impact
on the non-UI claimant population served under Employment and Immigration's
Employment Activity.
29 October 1992 - The Steering
Group on Prosperity released a report entitled Inventing Our Future:
An Action Plan for Canada's Prosperity. The report contained a number
of recommendations covering a broad spectrum of issues ranging from the
need for more disciplined fiscal policy, fair and competitive tax structures
and a single Canadian market to the creation of a strong learning culture
and a society where all individuals participate in, and benefit from the
opportunities flowing from a more prosperous Canada.
2 December 1992 - The Minister
of Finance announced in his economic statement that new tax incentives
would be developed and $250 million spent over the next five years
to encourage the private sector to undertake more training. The Minister
also announced that unemployment insurance premiums in 1993 would remain
unchanged at 1992 rates and the government would waive employer premiums,
up to a maximum of $30,000 per small enterprise, to encourage small firms
to hire additional workers.
17 February 1993 - Bill
C-113, Government Expenditures Restraint Act, 1993, No. 2, was tabled
in the House of Commons. Part IV would amend the Unemployment
Insurance Act by reducing the benefit rate from 60% to 57% of insurable
earnings until 1 April 1995 and would impose a total disqualification
on claimants who voluntarily leave employment without "just cause"
or who lose their employment due to misconduct.
26 April 1993 - Although
the Minister of Finance announced in the budget that the lower UI benefit
rate would remain at 57% beyond April 1995, this provision was never proclaimed.
23 June 1993 - Bill C-101
(An Act to amend the Canada Labour Code and the Public Service Staff Relations
Act) received Royal Assent. These changes were designed to make employment
standards under the Code more equitable vis-à-vis workers, reduce employers
administrative burden and introduce a mechanism to help resolve disputes
that could adversely affect the public interest.
December 1993 - The First
Ministers approved the Canada Infrastructure Works Program, a $6-billion
program whose costs are shared equally by the federal, provincial/territorial
and municipal governments. As of August 1996, over 12,000 projects had
been approved and roughly 97% of total funding had been committed. Assuming
about 60% incrementality, it was estimated that the net job creation impact
of the program over a ten-year period would be about 81,000 person-years.
18 January 1994 - In the
Speech from the Throne opening the first session of the thirty-fifth Parliament,
the government announced its intention to, among other things, move quickly
on its short-term job creation program (i.e., the tripartite infrastructure
program), create a Youth Service Corps and reform Canada's income security
system (including unemployment insurance) within two years.
22 February 1994 - the Minister
of Finance announced in the budget that some $400 million would be made
available in each of the fiscal years 1995-96 and 1996-97 to fund innovative
social assistance projects. In addition, the budget provided $1.7 billion
for the Atlantic Groundfish Industry Renewal and Adjustment Strategy.
15 June 1994 - The Budget
Implementation Act, 1994 received Royal Assent. Part V of this Act
amends the Unemployment Insurance Act by changing the variable
entrance requirement from 10-20 weeks of insurable employment to 12-20
weeks, depending on the regional unemployment rate; reducing benefit entitlement;
and adopting a two-tier benefit rate to assist low income claimants with
dependants.
23 June 1994 - The Canada
Student Financial Assistance Act received Royal Assent, thus paving
the way for, among other changes, an increase in loan limits for both
full-time and part-time students. The maximum loan for part-time students
increased by 60% to $4,000 per year.
5 October 1994 - The Minister
of Human Resources Development tabled a Discussion Paper on reforming
Canada's social security system. The paper provides a number of suggestions
for changing, among other things, employment development services, unemployment
insurance, transfer payments for post-secondary education, social assistance
and the child tax benefit. The Standing Committee on Human Resources Development
held public hearings on these proposals and tabled its report on 6 February
1995.
15 December 1995 - Bill
C-64 (An Act respecting employment equity) received Royal Assent. In general
terms, Bill C-64 amended the Employment Equity Act to put the federal
public sector under the legislation, to provide guidance to employers
on their obligations, and to clarify these and to create an enforcement
mechanism to ensure employer compliance.
20 June 1996 - Bill C-12
(An Act respecting employment insurance) received Royal Assent, replacing
the Unemployment Insurance Act. Employment insurance was designed
to achieve three primary policy objectives: to reshape Canadas unemployment
insurance system to better address the coverage and adjustment needs of
unemployed individuals; to reduce the extent to which the program encourages
firms and workers to use it (i.e. the problem of repeat use); and to reduce
program expenditures and improve the programs financing structure
so as to stimulate job creation.
1 July 1996 - The Minimum
Hourly Wage Order, 1996 came into effect. As a result of this change,
the federal minimum wage is now aligned with the general minimum wage
rate in each province and territory. As of 1 July 1996, the federal minimum
hourly wage increased from $4.00 to a low of $4.75 in Newfoundland and
a high of $7.00 in British Columbia.
30 August 1996 - The Minister
of Labour established an Advisory Committee to examine a broad range of
issues dealing with the changing nature of work. The Advisory Committee,
chaired by the Minister of Labour, released its report in June 1997. The
report contains seven broad recommendations such as the need to develop
labour regulations that deliver the same basic rights to all workers,
including the growing number employed in non-standard jobs. In addition,
public policy should not create artificial incentives that make one work
time arrangement more attractive than another.
12 February 1998 - The first
Employment Insurance Monitoring and Assessment Report was tabled
in the House of Commons. While data limitations permitted only a preliminary
analysis, it is estimated that between July 1995 - June 1996 and July
1996 - June 1997 total expenditures on benefits declined by 11.5%; expenditures
on Part II measures declined by 29%; the number of new claims (excluding
those under Part II of the Act) declined by 15%; and the proportion
of claimants exceeding minimum insurability limits increased (at least
during the first six months of the reform). According to this report,
the ratio of the number of regular EI beneficiaries to the number of unemployed
declined from 83% in 1989 to 43% for the 12-month period ending in October
1997. Human Resources Development Canada is currently studying this trend
and the results should be available by the end of this year.
24 February 1998 - The budget
announced several measures, including scholarships, tax-free RRSP withdrawals
for lifelong learning and tax relief for interest to help individuals
finance their education. The link between education and jobs is clear
employment rates are higher and unemployment rates are lower among
more highly educated workers than among their less educated counterparts.
The Minister of Finance
also announced an EI premium rebate to encourage employers to hire young
Canadians (18 to 24 years of age) in 1999 and 2000. Unlike the New Hires
Program, which is not age-specific, this new proposal may simply lead
to the displacement of non-youth workers. The government also intends
to allocate additional funds ($50 million in 1998-99, $75 million
in 1999-2000 and $100 million per year thereafter) to help young
individuals, primarily those who have not completed high school, to secure
employment.
19 June 1998 The
government announced that it would allocate $730 million to help
individuals and regions affected by the collapse of the Atlantic ground
fish industry. Up to $250 million will be devoted to retiring fishing
licences, $180 million will be used for final payments to former TAGs
clients, $65 million for early retirement, $135 million for active
labour market measures and $100 million for community economic development.
14 December 1998
The government announced that the temporary Transitional Jobs Fund (scheduled
to end on 31 March 1999) would be replaced by a permanently established
measure called the Canada Jobs Fund (CJF). The CJF will receive an annual
budget of $110 million. Regions with an unemployment rate of 10% or more
will be eligible under the new program (previously regions with an unemployment
rate of 12% or more were eligible).
29 April 1999 The
Aboriginal Human Resources Development Strategy was launched. This Strategy
is a five-year, $1.6-billion multi-initiative designed to expand employment
opportunities for Aboriginal people across the country. It builds on the
Regional Bilateral Agreements that transferred responsibility for designing
and delivering labour market programs directly to Aboriginal organizations.
18 June 1999 In view
of the long periods of joblessness experienced by individuals 55 years
of age and over, the government announced that it would allocate $15 million
this year and next to help fund pilot projects designed to develop new
approaches for enhancing the employment prospects of displaced older workers.
These projects will be guided by the Forum of Labour Market Ministers
Working Group on Older Workers.
1 June 2000 The
government announced its intention to provide financial support to the
recently created Canadian Apprenticeship Forum (CAF). The composition
of the CAF is much like that of the now defunct Canadian Labour Force
Development Board with representatives from business, labour, education
and equity groups. The CAF intends to support and promote the development
of Canadas apprenticeship training systems and thereby contribute
to skill development in the workplace.
22 June 2000 The
government announced that it would terminate the Canada Jobs Fund, one
of the programs that had been severely criticized following the release
of an internal audit on the administration of Human Resources Development
Canada grants and contributions. Funding for the CJF will be reallocated
to regional economic development agencies.
SELECTED
REFERENCES
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G. et al. The Canadian Workplace in Transition. IRC Press,
Queens University, 1994.
Canada.
From Unemployment to Employment Insurance: A Supplementary Paper. Minister
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C. et al. Unemployment Insurance: How to Make It Work. C.D.
Howe Institute, 1994.
OECD.
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* The
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1989; the paper has been regularly updated since that time.
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