Just the Facts - Employment Insurance

HRSDC Just the Facts – a feature to help dispel myths and misconceptions as well as raise awareness about HRSDC programs.

Women and Employment Insurance

Issue

Various stakeholder groups have been advocating for EI reform on the basis that it is unfair towards women, specifically concerning access.  

Fact

EI is an insurance system that protects individuals against the loss of employment income. Access to EI is determined by the work patterns of individual contributors, not by gender.

Statistics Canada’s 2007 Employment Insurance Coverage Survey shows that 81 per cent of unemployed women who had paid EI premiums and either lost their job or quit with just cause, were eligible to receive benefits.

Women's access to EI special benefits is very high. Data shows that 97 per cent of women working full time have sufficient hours of work to qualify for special benefits, which is the same level of access as for men working full time. Among women working part time, 66 per cent would have sufficient hours to be eligible for special benefits, which represents a somewhat higher rate of eligibility than for men working part time.

EI contains many features of importance for women. For instance, in 2007–2008:

• Women accounted for 68.3 per cent of all new claims for special benefits outside Quebec and 87.0 per cent of parental claims
• 77.2 per cent of claims for Family Supplement were from women
• Women represented 42.3 per cent of all Employment Benefits and Support Measures clients served.

Through EI and other important programs, this government is committed to assisting Canadian women. It should be noted that women returning to the work force after an absence to raise children do not need to accumulate 910 hours of insured work to qualify for regular benefits. The EI Act includes a specific provision that allows re-entrant mothers to qualify for benefits with the normal number of hours under the Variable Entrance Requirement.

The EI regulations now in place strike a balance between providing temporary income support for Canadians until they find new employment and keeping people active in the workplace.

For additional information on the Employment Insurance program, please visit http://www.hrsdc.gc.ca/eng/employment/ei/index.shtml.

The Canada Employment Insurance Financing Board

Issue

Some media have suggested that the creation of the Canada Employment Insurance Financing Board may affect delivery of Employment Insurance (EI) benefits or eligibility criteria for the program.

Fact

Budget 2008 announced the creation of the Canada Employment Insurance Financing Board to improve the governance and management of the EI Account.  The creation of this new Board will enhance the independence of premium rate setting, and ensure that EI premiums are used exclusively for the EI program.

The Canada Employment Insurance Financing Board’s specific responsibilities, as outlined in Chapter 3 of the Budget Plan, are:

• managing a separate EI account where any excess premiums from a given year will be held and invested until they are used to reduce premium rates in subsequent years;
• implementing an improved EI premium rate-setting mechanism that will ensure that EI revenues and expenditures break even over time and contribute to the relative stability of premium rates by limiting year to year changes in EI premiums to 15 cents; and
• maintaining a $2 billion cash reserve as a contingency fund that will support relative premium rate stability.

As such, the responsibilities of the new Board will pertain only to the financing of the EI program.  The Government of Canada and the existing EI Commission will continue to have full responsibility related to EI benefits and program delivery, including eligibility and benefit levels.

These changes are in keeping with the Government’s commitment to good management, and represent important improvements that will generate benefits for workers and their employers.  They will:

• ensure independent decision-making regarding the management of EI funds, and that these funds are only used to pay for EI benefits; 
• ensure that premium rates reflect actual program costs and take into account investment returns so that Canadians pay the right premium rates—just sufficient to cover the cost of benefits received; and
• place the program on firm financial footing going forward, and
• ensure it is well positioned to withstand changing economic conditions.

These measures are also consistent with recommendations of groups representing workers and employers and experts regarding how the EI Account should be managed.

As a result of these changes, employers and workers can be confident that from now on, the EI Account will be managed on a truly break-even basis over time, and that the Government of Canada will continue to manage the EI program and ensure that it meets the needs of today’s labour market.

For further information on the EI program, you may wish to visit the following Web site: http://www.hrsdc.gc.ca/eng/employment/ei/index.shtml.

For more information on the Board’s mandate, please see Chapter 3 of the Budget Plan, which is available on Finance Canada’s Web site at http://www.budget.gc.ca/2008/plan/table-eng.asp.

Ontario and Employment Insurance

Issue

The Government of Ontario argues that the province is not receiving its “fair share” from the Employment Insurance (EI) program. The Government of Ontario has called for changes to EI, arguing that Ontario workers require more hours to qualify for EI and receive less in benefits than claimants in other provinces.

Fact

EI provides income support to eligible unemployed Canadians wherever they live, and all contributors are entitled to benefits provided they meet qualifying and entitlement conditions.

For those who have been contributing to the program by paying premiums, eligibility and duration of EI benefits depends on insured hours worked and on local unemployment rates. For example, residents of Toronto require fewer hours of insured work to qualify for EI and may receive benefits longer than residents of Halifax, Calgary or Vancouver. The program is designed to ensure that unemployed Canadians living in areas with similar rates of unemployment and job opportunities are treated the same, regardless of where they live.

In 2006/07, Ontario residents were paid $2.16 billion in EI regular benefits.

Those in insured employment in Ontario are eligible to receive benefits at rates similar to those in the rest of the country. According to Statistics Canada’s Employment Insurance Coverage Survey (EICS), in 2007, 81.7% of the unemployed who had insured employment in Ontario were eligible to receive benefits, compared to 82.3% nationally.

In Ontario, a larger share of the unemployed had not been paying premiums or had voluntary quit a job. Only 66.2% of the unemployed in Ontario had been paying EI premiums, compared to 72.7% in the other provinces.

Ontario also has a slightly larger proportion of the unemployed who quit a job to go to school or for some reason that made them ineligible for EI benefits. This was the case for 16.6% of Ontario’s unemployed in 2007, compared to 15.0% in other provinces. Thus, by including all those unemployed who had not been paying premiums in their calculation, Ontario understates average benefits paid to the claimants in the province.

As indicated in the 2007 Monitoring and Assessment Report, claimants in Ontario receive similar benefits to those in the rest of Canada. In 2006-2007:

• On a weekly basis, regular claimants in Ontario received an average of $343, while those in the rest of Canada received an average of $335.
• Ontario residents claimed an average 15.8 weeks of benefits before returning to work, compared to 17.1 weeks for those in the rest of Canada.
• The average amount of regular benefits paid per EI claimant in Ontario was $5,628 compared to $6,251 for claimants in the rest of Canada.
• On average, across all provinces and territories (including Ontario), claimants use about 60% of the weeks of the benefits to which they are entitled.

The Government of Canada provides Ontario with funds under Part II of the EI Program for employment and training programs to meet the needs of the province and its residents. In 2007-2008, this funding amounted to over $529 million.

On February 21, 2008, the Government of Canada and Ontario signed a new agreement on training and skills development, which came into effect on April 1, 2008. Through this agreement, the Government of Canada will invest nearly $1.2 billion in Ontario’s labour market over the next six years, beginning with an investment of $195 million in 2008-09.

These funds will help individuals and workers who are not eligible for training under the EI program, including people working in sectors that are facing economic pressures, such as manufacturing and forestry, to improve their skills. The funding will also help individuals too often excluded from the labour force, including Aboriginal people, immigrants and persons with disability, as well as those workers who lack literacy and essential skills, get the training they need to obtain meaningful and sustainable employment.

The Government of Canada has also created a $1-billion Community Development Trust for all provinces, to assist vulnerable communities and laid-off workers through job training, and community and infrastructure development. For Ontario, this means $358 million over three years. This is in recognition of the fact that although the Canadian economy is performing well and the national unemployment rate is at its lowest in over 33 years, some sectors and communities remain vulnerable to circumstances resulting from changes in the global economy, and that a range of supports are required.

For additional information on the EI program, please visit http://www.hrsdc.gc.ca/eng/employment/ei/index.shtml.

Volunteering and EI Benefits

Issue

Can you volunteer and still be entitled to receive Employment Insurance (EI) benefits?

There is a misconception that Canadians who volunteer are not entitled to receive EI benefits.

Fact

Yes, you can do some volunteer work and still receive Employment Insurance benefits.

How does the EI program work?

The EI program pays you regular benefits if you lose your job through no fault of your own-for example, because of a shortage of work or a seasonal or mass lay-off-and you are available for and willing to work but you cannot find a job.

To be eligible for regular EI benefits, you must show that:

• you have been without work and without pay for at least seven consecutive days; and
• during the last 52 weeks or since your last claim, you have worked for the required number of insurable hours. This minimum number of hours is based on where you live and the unemployment rate in your region at the time you file your claim for benefits.

While claiming regular benefits, you must be available and willing to work, and you must be actively looking for work. Being available for work means you are willing to accept an offer of employment to which you are suited by skill, training, aptitude, or experience, and that you are willing to accept such an offer of employment for which there is a demand in the labour market. Being available for work involves more than waiting passively for a job offer-it also means acting in a way that reflects a sincere desire to work, and that clearly shows you have been unable to find a job.

What are the rules on volunteering?

Performing volunteer work does not mean you are no longer entitled to receive EI benefits. As long as individuals are still available for and actively looking for work every day, they remain eligible for EI.

For the purposes of the EI program, we consider volunteer services to be work performed for which you receive no pay, and for which you do not derive or hope to derive any benefit, profit, or financial or economic advantage.

For more information on the Employment Insurance program, please visit servicecanada.gc.ca/eng/sc/ei/index.shtml.