Montreal – Canada’s Employment Insurance program needs to be revised and updated to make it simpler, more generous and better able to meet the needs of today’s labour market, concludes a new report by the Institute for Research on Public Policy.
The federal government is undertaking a two-year review of Canada’s EI program, the first major review in more than 25 years. This IRPP report highlights the ideas and proposals that were put forward by a group of 12 EI experts, who convened in December 2021 to discuss ways to modernize EI.
“The current EI system is too complex and suffers from gaps in coverage that have made it increasingly ineffective over time,” said Colin Busby, IRPP Research Director and co-author of the report. “Changes are long overdue.”
This was brought home over the past two years as the federal government has introduced various contingency measures in response to the pandemic to cover unemployed Canadians who didn’t qualify for EI benefits.
EI’s shortcomings are likely to persist even after the pandemic ends, the report notes. New forms of work arrangements, Canada’s aging workforce, the transition to a low-carbon economy and other factors could make the labour market more volatile and add pressure to the already strained program. At the same time, a significant pool of self-employed workers and a shift to more short-duration, contract and temporary jobs means that a large swath of workers could continue to be excluded. The growing number of individuals who work for digital platforms such as UBER and DoorDash and who are classified by these firms as self-employed also poses a challenge, because they do not contribute to EI and don’t have the protections that other workers enjoy.
The workshop participants generally agreed, among other things, that eligibility rules should be eased to allow more unemployed workers to access benefits, that some benefits should be more generous, and that the program’s responsiveness to economic shocks should be improved. At the same time, the report acknowledges that some of the proposed reforms would entail higher costs and design challenges and could require changes to the way the program is funded.
“The objective of the working group was to provide the government with a wide range of reform options,” Busby said. Several participants called for a revised program that strikes a better balance between the permissive program that was in place until the early 1990s and the restrictive one we have today.
You can download the EI Working Group Report, How to Modernize Employment Insurance: Toward a Simpler, More Generous and Responsive Program, from the IRPP website (irpp.org).
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