Montreal — The COVID-19 pandemic is only the latest crisis to expose the inadequacies of the Employment Insurance (EI) program. As access to EI benefits varies across regions and many unemployed workers were not covered, Ottawa had no choice but to develop new temporary income-support programs to deal with the unprecedented layoffs brought on by confinement measures.
But this was not the first time that EI, the main pillar of Canada’s social safety net, has proven not up to the task. For 12 of the past 16 years, various ad hoc measures have been in place to prevent too many unemployed workers from running out of EI benefits before they found work.
A new study published by the Institute for Research on Public Policy, by David Gray (University of Ottawa) and Philip Leonard (University of New Brunswick), examines these temporary EI benefit extensions. They review the three types of measures implemented to support particular groups of unemployed workers: those in seasonal industries; those laid off in the 2008-09 recession; and those affected by the sharp drop in commodity prices in 2015. They assess the impact of these measures, including their effects on claimants’ behaviour.
Overall, the authors find that most benefit extensions have either been inefficient or inadequate. Only in one instance — during the last recession — were the extensions appropriate and effective.
“In our view, the federal government did the right thing earlier this year by circumventing EI’s creaky, sluggish apparatus to provide immediate income support to those no longer able to work due to public health measures. But the ultimate solution is to revamp the EI system to ensure benefit durations increase swiftly when unemployment rises,” say the study authors.
However, extending benefits may not work for everyone. Gray and Leonard caution that certain groups of the unemployed, in particular seasonal workers who have become dependant on EI, and long-tenured workers who have been permanently laid off have different needs.
For instance, research shows that displaced workers who had been with the same employer for many years were less likely than others to have found work a year after losing their jobs. Those who did earned significantly less than they did before. The authors urge policy-makers to provide these workers more effective employment supports including reemployment accounts, wage insurance and training programs.
“Employment Insurance plays a crucial role in helping unemployed workers adapt and adjust to ongoing changes in the labour market. But we need a system that is more responsive to economic downturns and, as we look ahead, better able to support those most at risk of being left behind in the post-pandemic recovery,” conclude Gray and Leonard.
Mind the Gap: Running Out of Employment Insurance Benefits, by David Gray and Philip Leonard, can be downloaded from the IRPP’s website (irpp.org).
The Institute for Research on Public Policy is an independent, national, bilingual, not-for-profit organization based in Montreal. To receive updates from the IRPP, please subscribe to our e‑mail list.
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