EI system failing recession “stress test”—report

January 25, 2010

OTTAWA—Canada’s Employment Insurance system is failing the “stress test” of the recession and fixing it must be a key priority in the upcoming federal budget, says a new report from the Canadian Centre for Policy Alternatives (CCPA).

According to the report, even as the EI system became easier to access the number of unemployed Canadians not in receipt of EI benefits jumped from 650,760 in October 2008 to 777,4000 in October 2009.

“Many unemployed workers have fallen through the cracks of the EI system,” says Andrew Jackson, Chief Economist with the Canadian Labour Congress and a CCPA Research Associate. “In October 2009, 51% of unemployed Canadians were collecting EI benefits—and just 41% in Ontario.”

The report warns that tens of thousands of workers who lost their jobs and did qualify for EI in the early stages of the Great Recession will have exhausted, or will soon exhaust, their benefits before being able to find a new job.

“Even before the recession, more than one in four EI claimants exhausted benefits before finding a new job,” Jackson says. “It is estimated that as many as 500,000 Canadians who initiated an EI claim in 2009 will exhaust their benefits because new jobs remain very difficult to find. As the number of EI exhaustees increases, so will provincial social assistance caseloads and the number of families living in poverty.”

The minor changes the Conservative government has made so far to the EI system haven’t done nearly enough to help unemployed Canadians. With the unemployment rate expected to remain at or near current levels through 2010, the report calls on the government to build on the U.S. example and extend EI benefits for all unemployed workers by at least 26 weeks.


Is Employment Insurance Working for Canada’s Unemployed? is available on the CCPA website: http://policyalternatives.ca

For more information contact Kerri-Anne Finn, CCPA Senior Communications Officer, at 613-563-1341 x306.