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OTTAWA—Employment Insurance benefits in Canada are well below the OECD average, says a new study released today by the Canadian Centre for Policy Alternatives (CCPA).
The study Canada’s Declining Social Safety Net: The case for EI reform by economist Lars Osberg finds that in terms of access, benefit duration, and income replacement levels, EI in Canada falls far below most other OECD countries and below the levels of Canadian unemployment insurance in past recessions.
“In this global recession, the weakness of Canada’s EI system has become a glaring federal policy omission,” says Osberg. “Now that they need a social safety net, many Canadians are discovering they do not have much of one.”
According to the study, the inadequacies of EI—combined with weakened provincial social assistance programs—have produced a massive risk shift, the burden of which is being borne by Canadian families who have fallen victim to the global recession.
“Since low-wage individuals are especially likely to experience unemployment, the downloading of recessionary risk is having its biggest impacts on disadvantaged Canadians,” Osberg says. “These impacts will only increase as EI benefits are exhausted in the coming months.”
The study warns that benefits for current EI recipients will run out sometime before February 2010, when the OECD estimates that employment will be 10.5%—substantially higher than it is now.
The study recommends reforms to EI: the easing of entrance requirements; and the creation of a ‘second tier’ of unemployment benefits to address the problems of those who are unemployed for long durations.
“The question for Canada’s political economy is—if the recession drags on—what happens if EI reforms are not forthcoming?” concludes Osberg.
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