SOMBA K'E/YELLOWKNIFE
Changes to eligibility requirements announced earlier this year under the employment insurance act came into effect last Sunday.

Anne Juneau, left, and Mark Populus protest changes to the federal Employment Insurance program for Yellowknife residents last February when the move was announced. The changes came into effect on Oct. 12, and could mean more than $2 million in lost benefits to Yellowknifers. - NNSL file photo

According to projections contained in a cabinet document, obtained by another local media outlet and posted to its website, 460 Yellowknifers on unemployment insurance would have lost $2.3 million in 2014 had the changes been in effect all year.

Outside of Yellowknife, 720 employment insurance claimants in the NWT would have lost a collective $3 million.

Since the 1970s, the three territories have distributed employment insurance as though the unemployment rates were fixed at 25 per cent. This meant the territories had a relatively low threshold for days worked in order to qualify for benefits.

In these previous conditions, a worker is eligible for benefits at 420 hours. The number of hours a person must work in order to qualify for employment insurance increases as unemployment dips below 13.1 per cent.

As of Oct. 12, actual employment rates will now be used to determine unemployment insurance benefits, based on the higher of either the seasonally adjusted prior 3-month average or the prior 12-month average unemployment rate.

Each territory will be divided into two zones -- capital and non-capital -- centred on Yellowknife, Iqaluit and Whitehorse respectively.

Current unemployment rates in the North are nowhere near the 25 per cent threshold used previously.

As of Oct. 10, the unemployment rate in the NWT was reported at 7.6 per cent including Yellowknife. The unemployment rate in the non-capital zone of the territories is estimated to be between 12 and 17 per cent.

The rate is lower in each of the capital zones. When the changes were announced last February, the unemployment rate in Yellowknife was estimated to be four per cent.

This means workers in a capital zone will need to accumulate 700 hours of work before qualifying for employment insurance.

At the time, federal Employment Minister Jason Kenney said the changes were meant to encourage workers to make the most of living in strong labour markets.

"The principle is this: if you in an area with a very strong labour market we want to encourage you to actively seek work, not to depend on EI," Kenney said.

Mary Lou Cherwaty, president of the Northern Territories Federation of Labour, described the changes that came into effect last Sunday as nothing less than "devastating for unemployed workers in the territories."

"One in three workers will see their benefits reduced, and the average worker will lose $4,500," Cherwaty told the Yellowknifer in an email.

Yellowknife Centre MLA Robert Hawkins questions who will be on the hook to make up the shortfall unemployed workers in the Yellowknife and the NWT will face.

"It's going to be a financial burden on the GNWT," Hawkins told Yellowknifer.

"Roughly $5 million will fall on the shoulders of the GNWT. The GNWT is going to have to prepare for the flood of new applicants for either housing or income support in general.

"The social safety network is going to face major demand this winter that I don't think we are prepared," he added.

Across the NWT, Nunavut and Yukon, the program changes will mean a savings of $9.9 million to the federal employment insurance operating account.