Are EI And Seasonal Work Setting Atlantic Canadian Firms Up For Disaster?
HALIFAX—An Atlantic Canadian economist says the region is facing a potential crisis in its seasonal labour force—and that Employment Insurance programs might be making it worse.
David Chaundy is the president and CEO of the Atlantic Provinces Economic Council (APEC). He recently helped write a report that explores seasonal work in the region and its effect on the economy.
Chaundy says Atlantic Canada relies more heavily on seasonal workers than the rest of the country, but the region’s changing demographics will soon start to create major issues in that workforce.
Seasonal Jobs Will Get Harder To Fill
Atlantic Canada has a much higher proportion of seasonal workers than the rest of Canada. APEC estimates there were 86,000 seasonal jobs in Atlantic Canada in 2019.
But APEC’s data suggest those seasonal positions will get harder and harder to fill as the demographics of the region change.
Young people, aged 15-24, account for about half of all seasonal workers in Atlantic Canada. But the number of 18-to-24-year-olds in Atlantic Canada is projected to drop by about 15 percent over the next two decades.
APEC says that could mean the loss of more than 5,000 seasonal workers.
Another big chunk of seasonal workers are older folks, aged 55 to 64, who work in rural areas. APEC says rural populations in Atlantic Canada will drop by 45 percent over the next twenty years.
Chaundy says these demographic changes will present major challenges in the coming decades for Atlantic Canadian employers that rely on seasonal workers.
“We really need to wrap our heads around this—and sooner rather than later—because people are going to be leaving the labor market and businesses are going to be forced to make changes,” he says.
Is EI Working As Intended?
Part of the problem, Chaundy argues, is that the Employment Insurance programs in Atlantic Canada make it easier for people to stay in seasonal positions, even when there are year-round jobs available.
The APEC report points out that EI claims in Atlantic Canada follow a specific seasonal pattern.
The number of people with jobs in Atlantic Canada falls by almost 60,0000 between August and December. Meanwhile, EI claims during that period spike by more than 20,000.
That seasonal variation is out of proportion with the rest of the country: between 2017 and 2019, it was about 30 percent higher than the national average.
The report suggests that, especially in rural communities where seasonal work is common, EI has become a form of income support.
Chaundy says that isn’t why EI exists—ideally, it’s used as a stopgap to hold people over until they get a new job, not as a yearly income supplement.
But, because it can be used as that yearly supplement, Chaundy says EI is likely encouraging people to stay in seasonal jobs that don’t fully cover their cost of living.
He says there are concerns Atlantic Canada isn’t maximizing its economic opportunities “because we have a system that maybe encourages some people to work part of the year when we actually want them working the full year—and there are opportunities for them to do that.”
Where Do Temporary Foreign Workers Fit In?
Chaundy says one solution might rest in another government-run program: the Temporary Foreign Worker program.
It might make sense, he argues, to lean more heavily on temporary foreign workers to fill some of the seasonal jobs permanent residents are doing. But he says governments would need to ensure changes to that program didn’t have unintended consequences.
“You would have to think about if relying more on… those temporary people is the optimal solution. Then we want to make sure that system is well-designed. But we also don’t want to encourage people to come if that means we’re just subsidizing with lower-wage, international workers – a business model that may not be fully viable,” he says.
That kind of thoughtfulness, he says, will be vital for governments creating policies to address some of these issues.
The relationship between seasonal employment and EI use is complex, Chaundy argues. Any potential reforms will require detailed analysis, dialogue, and a “comprehensive policy response” that helps manage the transition for workers, firms, and communities.
Trevor Nichols is the associate editor of Huddle, based in Halifax. Send him your feedback and story ideas: [email protected].