New employment insurance rules that divide Prince Edward Island into two EI regions will result in $1 million in annual savings for the federal government and millions in reduced payments, according to federal documents released Friday.
A regulatory impact analysis statement for the proposed EI changes was published in the Canada Gazette on Friday.
The cost-benefit statement shows the creation of two EI regions in P.E.I. will reduce program costs by $1 million every year.
It will also mean an annual $10-million reduction in total EI payments to claimants in the Yukon, the Northwest Territories, Nunavut and Prince Edward Island, according to the federal government's analysis.
In February, the feds announced Prince Edward Island and the territories would soon be split into new employment insurance regions.
P.E.I. will go from being one EI region to having two EI zones — a capital region and a non-capital region.
Fisheries Minister and Egmont MP Gail Shea explained in February there are higher unemployment rates in non-capital areas of the province, and this separation of rural from urban will make the Island's EI system “more fair and equitable for Islanders living in rural areas.”
The change will result in higher benefits for rural claimants.
The cost-benefit statement released Friday attaches concrete numbers on how this will break down in P.E.I.
It estimates 9,150 EI claimants living outside Charlottetown would have had higher benefits if the changes had been implemented this year.
Meanwhile, 5,450 people in Charlottetown would have seen their benefits reduced.
But despite the fact the majority of Islanders are expected to see increases to their EI benefits, the overall amount that will be paid out is lower.
The federal department estimates the 5,450 people in the Charlottetown region will see their total claims cut by $2,560.
The 9,150 rural Islanders getting a bump in EI payments will only see an average total increase of $1,620.
Opposition NDP MP Robert Chisholm said Friday these numbers show the federal government is picking winners and losers from a group of already unemployed Islanders.
“We know that less than 40 per cent of people who are unemployed are actually eligible for EI under the criteria that the government uses, and now they're not only making it more difficult for people to be eligible, but now they're even dividing the pie up more amongst that small group of people who are eligible,” Chisholm said.
The Nova Scotia MP pointed to the millions in annual savings projected as a result of these changes.
“They are trying to saving money, but why? There's a surplus in the EI fund. Workers and employers pay into this fund to provide transition support for workers who are unemployed ... this isn't government money,” Chisholm said.
“They're dicing and slicing, picking winners and picking losers out of a pot of people that are already unemployed ... I mean, how pathetic can you get?”
Stakeholders can provide comment on the proposed changes to EI regions for the next 30 days.
The changes are scheduled to come into effect on October 12.