Employment insurance failing workers

Unseen in nearly 40 years

Since 2012, less than 40% of unemployed Canadians are receiving employment insurance (EI) benefits, which means more than 60% get nothing. This hasn't been seen in forty years.

In fact until 1990 those proportions were completely reversed. From 1976 to 1990, the rate of unemployed receiving EI averaged 76%.

Why did this happen?

Reforms to EI in the 90s

Throughout the 1990s, the federal government made regressive reforms to the EI program.

Those reforms:

  • increase the length of employment required to qualify for EI benefits
  • shortened the duration of benefits
  • reduced the amount of paid benefits
  • excluded people who resigned or were dismissed for misconduct

These reforms are responsible for nearly half of the drop in EI coverage, according to a study done by Human Resources Development Canada.

Labour market changes

Changes to the labour market have also contributed to the drop in EI coverage.

  • Part-time and temporary workers are in much greater numbers than before. And for them it's often difficult to work enough hours to qualify for employment insurance.

  • There are also more unemployed who have been jobless for over a year and they are automatically ineligible for EI benefits.

Harper government’s EI reform

In 2013, a new employment insurance reform came into effect. According to projections by the Conservative government, this reform was expected to cut the benefits of 8,000 people that year.

The government has not provided enough information to know if that prediction came true. The percentage of the unemployed receiving benefits was lower in 2013 than in 2012 and has continued to decline. In 2012 and 2013 records were broken, with less than 40% of the unemployed receiving benefits. And that trend continues - only about 38.6% of unemployed Canadians likely qualified for EI in 2014, according to an independent report from the Office of the Superintendent of Financial Institutions.

Workers contribute but get no benefits

Most of these people have previously paid employment insurance premiums, often for years, because the program is funded entirely by mandatory contributions from employees and employers. There's not a penny of public money in there.

Government uses EI surplus to balance budget

As if it weren’t bad enough that fewer and fewer unemployed are getting benefits, they are also paying too much for it. In 2013 and 2014, the government collected more than it needed in EI premiums. Instead of using that extra money to provide benefits to more unemployed workers, it took the money to create a budget surplus in 2015.

All of these facts show that there is a problem – a serious problem – with our Employment Insurance system.





June 14, 2015