Employment Insurance Monitoring and Assessment Report for the fiscal year beginning April 1, 2016 and ending March 31, 2017 Chapter II - 3. Employment Insurance support for apprentices

From: Employment and Social Development Canada

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3. Employment Insurance support for apprentices

For many skilled trades, apprenticeship is the path by which individuals gain the skills and experience necessary for certification and to fully participate in the labour market. In Canada, the apprenticeship system is an industry-driven learning system that combines on-the-job and technical training. On-the-job training (during which the apprentice is an employee and earns a wage) is under the direction of a journeyperson. Technical training is the instruction, at a college or other training institution, to support what is learned in the workplace.

Apprenticeship training in Canada

Each province or territory is responsible for apprenticeship training within its jurisdiction. As a result, apprenticeship programs in Canada, including the duration and delivery method of technical training, vary across trades and across provinces and territories.

In Quebec, for example, apprentices complete all of their technical training at a college or training institution before beginning on-the job-training. In the rest of Canada, apprentices start with on-the-job training which is followed by technical training through a variety of approaches. These include in-class learning, self-learning, distance learning, night classes or day release programs.

In most jurisdictions, to enter an apprenticeship program a prospective apprentice must be at least 16 years old and have successfully completed Grade 12 or have an equivalent amount of work experience or related education. In addition, the potential apprentice must find a job with an employer who will sponsor and train him or her under the mentorship of a qualified person.

To help Canadians continue their apprenticeship and become certified journeypersons, the Employment Insurance program offers income support to those who stop working for the sole purpose of attending full-time technical training (sometimes referred to as block-release training). To qualify for the benefits, their respective province or territory must have referred them under section 25 of the Employment Insurance Act and they must meet the other EI regular benefits eligibility requirements (for instance have sufficient hours of insurable employment during their qualifying period). Employers may also choose to offer their apprentices Supplemental Unemployment Benefit (SUB) plans to increase their weekly earnings during their periods of technical training, up to 95% of the apprentice’s normal weekly earnings.Footnote 76

The EI program also enables apprenticeship training by reducing the income gap experienced by eligible apprentices in other ways: 1) they can apply for EI benefits up to seven days before their last day of work; 2) they can elect to be exempt from bi-weekly reporting requirements while receiving EI benefits during full-time technical training and 3) they are required to serve only one waiting period for the full duration of their apprenticeship, even if it involves multiple blocks of full-time technical training, as long as they remain in the same apprenticeship program.

While attending full-time technical training, apprentices also receive a special reference code issued by their province or territory or their training institution that facilitates faster processing of their EI claims and is issued for each block of full-time technical training. A recent study showed that 84.5% of EI apprentices in the reporting fiscal year received their first benefits payment within 28 days of filling compared with 78.5% for all regular claimants.Footnote 77

Moreover, apprentices may be entitled to receive financial support under Part II of the Employment Insurance Act,Footnote 78 which is delivered by the provinces and territories under the Labour Market Development Agreements. These EI benefits help cover accommodation, child care, transportation and other costs incurred while attending technical training. Other financial support from the Government of Canada is also available through programs such as the Canada Apprentice Loan and various apprenticeship grants.

The following sections present detailed statistics on the number of EI claims from apprentices, their weekly level of EI benefits and the duration of their benefits. EI claims from apprentices refer to claims from EI claimants referred under section 25 of the Employment Insurance Act for which at least one dollar of EI regular benefits was paid during a period of full-time apprenticeship training.

3.1 Employment Insurance claims from apprentices and amount paid

In FY1617, the number of EI claims established from apprentices declined sharply (-20.5% or -11,500). This is the first decrease in six years and its lowest level (44,500 claims) over the same period. The decline was concentrated in the regions the most impacted by the downturn in commodity prices. Alberta alone accounted for 63.4% of the decline (-7,300). As a result, the amount paid in EI benefits to apprentices nationally also went down by 17.8% to $283.5 million.

Outside of periods of full-time training and during the benefit period of an open claim, an apprentice may experience a loss of employment income due to circumstances that may require the apprentice to access other types of EI benefits (for instance, lack of available work or care for a new born child). The claimant may claim those benefits if he or she meets the eligibility requirements for the relevant EI benefit. Of all claims established from apprentices in the reporting fiscal year, 41.0% (or 18,200 claims) contained at least one week of regular benefits paid outside of periods of full-time training. Meanwhile, 3.1% (or 1,400 claims) included at least one week of special benefits.

EI regular benefits while on full-time technical training made up the bulk of the total EI benefits amount paid to apprentices in FY1617 (180.6 million or 63.7% of the total benefits paid to apprentices). Regular benefits outside of periods of full-time training accounted for most of the remaining benefits paid (34.2%), with a small fraction paid in special benefits (2.0%).

Employment Insurance claims from apprentices and amount paid, by region, gender and age

As Table 34 shows, the majority of EI claims from apprentices in the reporting fiscal year were established in Ontario (29.5%), Alberta (29.0%), and British Columbia (18.1%). Over the same period, total benefits paid to apprentices have followed a pattern very similar to the one for EI claims established.

The majority of EI claimants in apprenticeship programs and attending full-time technical training are men (95.7% of claims established in FY1617). Men also received the bulk of all EI benefits paid to apprentices ($269.7 million or 95.2%). The low proportion of claims by women and benefits paid to them is largely due to the low share of women amongst all apprenticeship training registrations (13.4% in 2015).Footnote 79

Table 34 - Employment Insurance claims from apprentices and amount paid by region, gender and age, Canada, 2015/2016 to 2016/2017
  Number of claims established Amount paid ($ millions)
2015/2016 2016/2017 Change (%) 2015/2016 2016/2017 Change (%)
Region*
Newfoundland and Labrador 1,740r 1,140 -34.5% $15.4r $11.8 -23.0%
Prince Edward Island 310 210 -32.3% $2.0 $1.2 -38.1%
Nova Scotia 1,380r 1,210 -12.3% $9.1r $7.0 -23.2%
New Brunswick 1,670 1,450 -13.2% $11.5r $9.8 -14.9%
Quebec 200 170 -15.0% $1.5 $1.4 -3.3%
Ontario 13,020r 13,110 +0.7% $69.3r $68.8 -0.7%
Manitoba 3,360r 2,930 -12.8% $19.5r $17.5 -10.0%
Saskatchewan 4,680r 3,110 -33.5% $26.8r $21.4 -20.3%
Alberta 20,140r 12,880 -36.0% $136.2r $99.8 -26.7%
British Columbia 9,210r 8,070 -12.4% $52.5r $43.6 -17.0%
Territories 220r 190 -13.6% $1.3r $1.1 -19.2%
Gender
Men 53,470r 42,550 -20.4% $328.4r $269.7 -17.9%
Women 2,460 1,920 -22.0% $16.7 $13.7 -17.6%
Age category
24 years old and under 25,250 r 19,750 -21.8% $143.4 r $110.6 -22.8%
25 to 44 years old 29,000 r 23,140 -20.2% $188.1 r $160.8 -14.5%
45 years old and over 1,680 1,580 -6.0% $13.5 $12.0 -10.7%
Canada 55,930r 44,470 -20.5% $345.0r $283.5 -17.8%

Note: Totals may not add up due to rounding. Percentage change is based on unrounded numbers. Includes all claims from apprentices referred under Section 25 of the Employment Insurance Act for which at least $1 of EI benefits was paid while the claimant was on training.

*The low number of EI apprentices in Quebec, is due to the unique program design in which apprentices complete all of the technical training prior to beginning on-the-job training.

Source: Employment and Social Development Canada, Employment Insurance (EI) administrative data. Data are based on a 10% sample of EI administrative data.

Those aged 25 to 44 years old established the largest share of EI claims associated with apprenticeship programs and full-time technical training (52.0% in the reporting fiscal year). Claimants aged 15 to 24 years old accounted for a much larger share of EI apprenticeship claim s (44.4%) relative to their share of EI regular benefit claims overall (9.6%). Finally, claimants aged 45 years and over were underrepresented (3.6% of EI apprenticeship claims versus 45.9% of all EI regular claims). This is to be expected as the incidence of job-related training declines with age, though the gap between older and younger workers appears to be shrinking over time.Footnote 80

Employment Insurance claims from apprentices and amount paid, by sector and occupation

Similar to previous years, more than half (59.4%) of the apprentice claims in the reference period were from the Construction sector (see Table 35). EI claimants previously employed in the Manufacturing, Other services (excluding Public administration)Footnote 81 and Retail trade sectors also accounted for a greater proportion of apprentice claims compared with those from other sectors.

Table 35 - Employment Insurance claims from apprentices and amount paid, by sector and occupational grouping, Canada, 2015/2016 to 2016/2017
  Number of claims established Amount paid ($ millions)
2015/2016 2016/2017 Change (%) 2015/2016 2016/2017 Change (%)
Sector
Construction 33,930r 26,430 -22.1% $220.4r $180.6 -18.0%
Manufacturing 4,310 3,310 -23.2% $27.1 $23.3 -14.1%
Other services (excluding public administration) 3,760 2,840 -24.5% $19.3 $13.6 -29.2%
Other industries 13,930r 11,890 -14.6% $78.2r $65.9 -15.7%
Occupational grouping
Trades and skilled transport and equipment operators 50,310r 40,280 -19.9% $310.6r $255.8 -17.6%
Other occupations 5,620r 4,190 -25.4% $34.4 $27.7 -19.6%
Canada 55,930r 44,470 -20.5% $345.0r $283.5 -17.8%

Note: Totals may not add up to the total due to rounding. Percentage change is based on unrounded numbers. Includes all claims from apprentices (referred under Section 25 of the Employment Insurance Act for which at least $1 of EI benefits was paid while the claimant was on training.

Source: Employment and Social Development Canada, Employment Insurance (EI) administrative data. Data are based on a 10% sample of EI administrative data.

In terms of amount paid in benefits, claimants employed in Construction (63.7%), Manufacturing (8.2%) and Other services (excluding Public administration)—4.8% received over three fourth of the total benefits paid to apprentices during the reporting fiscal year.

The majority of EI claimants participating in apprenticeship programs and full-time technical training are associated with the Trades and skilled transport and equipment operators occupational groupFootnote 82 (90.6% during the reporting fiscal year). These claimants also received 90.2% of total benefits paid to apprentices. While apprentice claimants from this occupational group were mainly employed in the Construction sector, they were also found in Manufacturing, Other services (excluding Public administration) and Retail trade sectors.

3.2 Level and duration of Employment Insurance benefits for apprentices

During the reference period, the average weekly benefit rate payable to apprentices increased by 0.8% to $484. Consistent with previous years, the average weekly benefit rate for apprentices was higher than the average for EI regular claims ($449) overall.

Apprentice claimants from Alberta and the Territories received the highest average weekly benefit rate during the reporting period ($507). Those from Prince Edward Island, despite recording the most important increase in the average weekly EI benefit rate (+4.6%) posted the lowest average weekly benefit rate ($435). On average, the weekly benefit rate received was higher among men ($485) than women ($468) and among claimants aged 45 years old or more ($503) compared to claimants under 25 years old ($468).

The average duration of EI regular benefits received by EI claimants while on full-time technical training was 9.4 weeks for claims completed during the reporting fiscal year. Claims established in Nova Scotia and New Brunswick, completed during the reference period posted the lowest average duration (7.1 weeks and 7.6 weeks respectively). Conversely, those from Alberta and the Territories posted the highest ones (10.2 and 10.0 weeks respectively). The average duration of EI regular benefits received while on full-time technical training was somewhat higher for men (9.4 weeks) relative to women (8.9 weeks). Claimants aged 55 years or older received somewhat fewer weeks of benefits (9.0 weeks) relative to claimants from other age groups.

In addition to regular benefits paid while on full-time training, apprentices qualifying for EI regular benefits outside of periods of full-time training received an average of 12.7 weeks of EI regular benefits. As observed with the duration of EI regular benefits—see subsection 2.2.5—the duration was usually higher in Atlantic Canada (ranging between 11.0 weeks in Prince Edward Island to 19.3 weeks in Newfoundland and Labrador). Alberta and Saskatchewan, regions in which many claimants were eligible for the additional weeks of EI regular benefits also presented above average durations. Women (15.5 weeks) and claimants aged 45 years old and over (16.4 weeks) also claimed, on average, more weeks of EI regular benefits relative to, respectively, men and claimants from other age groups.

In addition to changes in economic cycles and regulations, training can also affect future use of EI regular benefits. A recent studyFootnote 83 found that participation in job-related training in a given year reduces the probability of receiving EI regular benefits in the following year and that it was due to employer-sponsored and workplace-based job-related training rather than self-sponsored or classroom-based training.

Employment Insurance apprentices and reason for job separation

While the majority of EI apprentices temporarily leave their job in order to attend full-time technical training, some others will register in an apprenticeship program following the termination of their job. The circumstances leading an individual to become an EI apprentice may have an impact on their interaction with the EI program.

For instance, the use of EI regular benefits is much more frequent and important for EI apprentices that were laid-off compared with those that had a block-release for full-time technical training. In the reporting fiscal year, 89.1% of all completed claims from EI apprentices whose last job ended with a layoff received EI regular benefit during their claim for an average duration of 16.3 weeks. In comparison, 37.5% of EI apprentices that temporarily stopped working for the sole purpose of attending full-time technical training received EI regular benefits for an average of 10.4 weeks.

On average, laid-off EI apprentices received a total of 23.8 weeks of EI benefits (all types of benefits considered) in the reference period, almost twice as much as block-released EI apprentices (13.7 weeks). This difference is also reflected in total EI benefits paid to each type of EI apprentices, as laid-off apprentices received on average $11,497 compared with $6,575 for those on block-release training.

In addition, a much greater share of laid-off EI apprentices served the waiting period (83.8%) relative to EI apprentices on block-release training (51.7%).

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