EI Monitoring and Assessment Report 2012/13 Annex 7 - Recent Changes to the EI Program

Notice: Refer to the Table of contents to navigate through the EI Monitoring and Assessment Report 2012/13.

Annex 7.1 - Major Changes to the Employment Insurance (EI) Program since 1996/97

Regulatory Amendments (2012)
Element Rationale
Limiting Access to Maternity/Parental Benefits to Persons Authorized to Remain in Canada (EI Regulations 55 and 55.01)
  • Claimants who leave Canada and whose work permit and social insurance number (SIN) expire are no longer eligible to receive maternity/parental benefits.
  • Claimants with a valid SIN can continue to receive these benefits both inside and outside Canada.
  • Ensures that maternity/parental benefits are paid only to claimants with ongoing ties to the Canadian labour market—notably, those authorized to live and work in Canada.
Working While on Claim (WWC) Pilot Project
  • Pilot Project No. 8 (WWC Pilot Project) was introduced in 2005 in 23 EI regions of relatively high unemployment (10% or higher). It was re-introduced nationally in 2008 as Pilot Project No. 12.
  • These pilot projects increased the amount that claimants were allowed to earn while on claim to $75 per week or 40% of weekly benefits, whichever was higher.Any income above that amount was deducted in full from benefits. These pilots applied toregular, parental, compassionate care and fishing benefits, but excluded maternity and sickness benefits.
  • Pilot Project No. 12 was extended on October 12, 2010, until August 6, 2011.
  • Budget 2011 announced a one-year renewal of the WWC Pilot Project, available nationally, until August 4, 2012.
  • On August 5, 2012, as part of Economic Action Plan 2012, the Government introduced Pilot Project No. 18, under which claimants keep 50% of their benefits from the first dollar earned, up to 90% of weekly insurable earnings, to ensure that claimants do not earn more than when they were working. Claimants have the option of reverting to the terms of Pilot Project 12.
  • Tested whether allowing claimants to earn more income while receiving EI benefits gave them incentives to accept all available work.
  • Renewal provided additional data to assess the effectiveness of the pilot during a period of economic recovery and a full economic cycle.
  • Pilot Project 18 tests whether the new approach will further encourage claimants to work additional days while on claim. It is also considered fairer, since it provides a uniform exemption for all those working while on claim, not just those working about one day a week.

Budget Implementation Act, Part II: Bill C-45 (2012)
Element Rationale
Canada Employment Insurance Financing Board (CEIFB) Act
  • Effective March 7, 2013, the Canada Employment Insurance Financing Board Act has been suspended and the CEIFB has been dissolved until the CEIFB can fulfill its full legislative mandate of setting premium rates and investing surplus premium revenues, once the EI Operating Account returns to cumulative balance.
  • Ensures that independent EI rate-setting is performed in the most cost-effective manner.
Premium Rate-Setting
  • An interim rate-setting regime takes effect, under which EI premium rates are set by the Governor-in-Council on the joint recommendation of the Ministers of Employment and Social Development, and Finance. The 2014 rate will be the first rate set under the interim regime.
  • Ensures premium rates are set according to the premium rate-setting mechanism set out in the Employment Insurance Act, and provides ongoing stability and predictability for premium payers.

Helping Families in Need Act: Bill C-44 (2012)
Element Rationale
Parents of Critically Ill Children (PCIC)
  • Effective June 9, 2013, a new 35-week EI special benefit to provide income support to eligible parents who are unable to work while providing care or support to a critically ill or injured child.
  • Bill C-44 also amended the Canada Labour Code to protect the jobs of employees under federal jurisdiction while they take unpaid leave to care for their critically ill or injured child.
  • Recognizes the needs of parents, who are likely to take time away from work when their child is critically ill.
  • Helps parents balance work and family responsibilities by reducing the financial pressure faced by parents who take time off work to care for their critically ill or injured children.
Flexible Access to Sickness and Maternity/Parental Benefits
  • Effective March 24, 2013, claimants receiving parental benefits no longer have to be “otherwise available” for work to receive sickness benefits.
  • Allows claimants on parental benefits to claim sickness benefits and have their benefit period extended by up to 15 weeks.
  • Recognizes that when a parent is sick, he/she may not be able to take care of and bond with his/her child.
  • Enhances the flexibility and responsiveness of the EI program.

Budget Implementation Act: Bill C-38 (2012)
Element Rationale
Connecting Canadians to Available Jobs (CCAJ)
  • Enhances the content and frequency of job and labour market information for job seekers.
  • Strengthens and clarifies claimants’ obligations by defining reasonable job search and suitable employment for claimants who are receiving EI regular or fishing benefits.
  • Ensures Canadians are considered before temporary foreign workers are hired to fill job vacancies.
  • Initiate discussions with provinces and territories to make skills training and job search supports available to EI claimants earlier in their claim.
  • Ensures unemployed Canadians are better connected with available jobs in their local area.
  • Clarifies claimants’ responsibility to undertake a reasonable job search for suitable employment while receiving EI regular or fishing benefits.
Variable Best Weeks (VBW)
  • EI claimants (with the exception of fishing and self-employed claimants) have EI benefit amounts calculated based on the weeks of their highest insurable earnings during the 52-week qualifying period.
  • The best 14 to 22 weeks are used to calculate benefits, depending on the unemployment rate in the EI economic region where the claimant resides.
  • Makes the EI program more responsive to changes in local labour markets.
  • Ensures that those living in similar labour markets receive similar benefits.
Premium Rate-Setting
  • The EI premium rate-setting mechanism has been amended whereby the premium rate will be set annually at a seven-year break-even rate. This revised rate-setting mechanism is intended to come into force once the EI Operating Account has returned to cumulative balance.
  • The legislated limit on year-to-year changes to the premium rate has been adjusted from 15 cents to 5 cents per $100 of insurable earnings.
  • Advanced the date by which the premium rate must be set to September 14th, rather than November 14th.
  • Ensures that the EI Operating Account is in cumulative balance at the end of the seven-year period.
  • Enhances the predictability and stability of the EI premium rate.
  • Provides employers and workers with more notice of the EI premium rate for the coming year.
Social Security Tribunal (SST)
  • The Social Security Tribunal (SST) replaces the four Employment and Social Development Canada tribunals for Employment Insurance (EI), Canada Pension Plan (CPP) and Old Age Security (OAS) appeals with a single decision-making body.
  • The new SST is comprised of two levels of appeal, similar to the previous appeal process:
  • The General Division has an Employment Insurance Section for EI appeals, and an Income Security Section for CPP and OAS appeals. A vice-chairperson will head each of the sections of this Division.
  • The Appeal Division decides appeals of decisions made by the General Division. The third vice-chairperson will head this Division.
  • Both divisions are dedicated to providing fair and impartial reviews of government decisions on EI, CPP and OAS.
  • Before an EI appeal can be filed with the SST, clients must make a formal request for reconsideration. This is a new process whereby EI clients who disagree with the Canada Employment Insurance Commission’s decision are able to submit new or additional information that the Commission is required to review to determine if the decision can be reversed or modified.
  • The SST will move away from the current paper-based system through the use of electronic documents and will enable clients to participate in hearings through telephone and video conferencing, where appropriate.
  • Appeals will be considered and decided by single member panels. Most tribunal members are full-time and dedicated solely to hearing and deciding EI or CPP and OAS appeals.
  • Tribunal members will have access to new tools including written (or ‘on the record’) considerations for straightforward appeals and the authority to summarily dismiss an appeal when the member is satisfied that the appeal has no reasonable chance of success.
  • The SST began its operations on April 1, 2013. Any appeals that were filed to the EI Board of Referees before April 1, 2013 but not heard by October 31, 2013 will be transferred to the SST. Any appeals that were filed and not heard by the EI Umpire before April 1, 2013 were transferred to the SST. On April 1, 2013, a total of 1,070 files were transferred to the SST.
  • Legislative amendments to eliminate administrative duplication in appeals and tribunal services by replacing the current administrative tribunal system for major federal social security programs with a single-window decision body.
  • This new approach to appeals introduced a number of measures to improve efficiencies, simplify and modernize the process and reduce costs.

Regulatory Amendments: Extended EI Benefits and Best 14 Weeks Pilot Projects (2010)
Element Rationale
Extended EI Benefits Pilot Project
  • EI Pilot Project No. 6, Pilot Project Relating to Increased Weeks of Benefits, was introduced for a two-year period in 2004 in 24 EI regions of high unemployment (10% or higher).
  • The pilot was re-introduced as a new pilot project, Pilot Project No. 10, for a period of 18 months in 2006 in 21 EI economic regions and was further extended until May 31, 2009.
  • Pilot Project No. 10 ended in February 2009 and was replaced by the Extra Five Weeks Economic Action Plan measure, which lasted until September 11, 2010.
  • On October 12, 2010, the Government of Canada re-introduced the Extended EI Benefits Pilot Project (as Pilot Project No. 15) for two years, until September 15, 2012, or earlier if there was a sustained economic recovery. The pilot was based on the same parameters and included the same 21 EI economic regions as Pilot Project No. 10.
  • Pilot Project No. 15 increased the maximum number of weeks for which benefits could be paid by 5, to a maximum of 45 weeks.
  • This pilot project applied to claimants whose benefit period began on or after September 12, 2010, and ended on one of the following dates, whichever came first:
    • September 15, 2012; or
    • the second Saturday after the first day of the 12 th consecutive period (beginning after October 9, 2010) when the regional unemployment rate was less than 8% in the region in which the benefit period was established.
  • Pilot Project No. 15 concluded earlier in regions where the unemployment rate was less than 8% for 12 consecutive months. This was the case for the EI economic region of St. John’s and, as a result, the Extended EI Benefits pilot project ended in this region on September 24, 2011.
  • Tested the costs and impact of extending the number of weeks of benefits in EI economic regions of relatively high unemployment.
  • Provided time-limited, broad-based support for all workers during the recent recession.
  • Tested the effectiveness of providing additional EI regular benefits in reducing the number of individuals experiencing an income gap between EI and their return to work.
  • Allowed for further collection of data and testing to more fully capture the impact of Pilot Project No. 10 during a period of economic recovery.
Best 14 Weeks Pilot Project
  • Pilot Project No. 7 (Best 14 Weeks) was introduced in 2005 in 23 EI regions of relatively high unemployment (10% or higher). It was re-introduced in 2008 for two years as Pilot Project No.11 in 25 EI economic regions with an unemployment rate of 8% or higher.
  • Under this pilot project, EI benefits were based on claimants’ 14 weeks of highest earnings in the 52 weeks before the claim or since the beginning of the last claim.
  • Pilot Project No. 11 was extended on October 12, 2010, until June 25, 2011.
  • Budget 2011 announced a one-year renewal of the Best 14 Weeks pilot project, available in the same 25 EI economic regions, until June 23, 2012.
  • Tested whether basing claimants’ benefit rate on their 14 weeks of highest earnings in the 52 weeks before they claimed EI encouraged claimants to accept all available work.
  • Provided additional data to assess the effectiveness of the pilot during a period of economic recovery and a full economic cycle.

Fairness for Military Families Act: Bill C-13 (2010)
Element Rationale
Improved Access to EI Parental Benefits for Military Families
  • The EI parental benefits eligibility window has been extended to support Canadian Forces (CF) members, including reservists, who are ordered to return to duty while on parental leave or whose parental leave is deferred as a result of an imperative military requirement.
  • This gives these CF members a window of up to 104 weeks following their child’s birth or adoption in which to access part or all of their 35 weeks of EI parental benefit entitlement.
  • Provides additional flexibility to military families to access parental benefits for parent-child bonding, while recognizing the importance of military service.

Employment Insurance Operating Account: Bill C-9 (2010)
Element Rationale
Employment Insurance Operating Account
  • The Employment Insurance Operating Account has been established in the accounts of Canada to record all EI-related credits and charges since January 1, 2009, the date from which the CEIFB was to ensure that EI revenues and expenditures broke even and the EI Account was closed.
  • This change repeals the provision under which advances from the Consolidated Revenue Fund to the EI Account were made and the provision under which interest could be paid on the balance of the EI Account.
  • The CEIFB’s obligation to set EI premium rates under section 66 of the Employment Insurance Act has been clarified to ensure that EI revenues and expenditures recorded in the EI Operating Account balance over time, beginning January 1, 2009.
  • Further strengthens the transparency and effectiveness of the financing of the EI program.
  • In line with steps taken in 2008 to establish the CEIFB.

Fairness for the Self-Employed: Bill C-56 (2009)
Element Rationale
Special Benefits for Self-Employed Persons
  • Effective January 31, 2010, EI maternity, parental, sickness and compassionate care benefits have been extended to self-employed persons. Self-employed persons can opt into the EI program. Benefits were paid starting January 1, 2011.
  • These benefits for self-employed persons mirror special benefits available to salaried employees under the current EI program.
  • Provides a voluntary scheme of EI benefits to self-employed Canadians for life transitions such as the birth of a child, adoption, illness or the grave illness of a family member.

Budget Implementation Act: Bill C-10 (2009)
Element Rationale
Premium Rates
  • Legislation was enacted to retroactively set the premium rates for 2002, 2003 and 2005.
  • This retroactive change was made necessary by the ruling of the Supreme Court of Canada in the CSN-Arvida case, in which the Court ruled that the premium rates in 2002, 2003 and 2005 were not constitutionally valid as regulatory fees and represented an unlawful tax on premium payers.

Canada Employment Insurance Financing Board ( CEIFB): Bill C-50 (2008)
Element Rationale
  • The Act creating the CEIFB became effective on June 18, 2008.
  • The CEIFB’s mandate was to:
    • set EI premium rates using a modified premium rate-setting process; and
    • manage a separate account where excess premiums were held and invested.
  • Ensured that EI revenues were sufficient to cover EI costs in the following year.
  • Used current premium surpluses to reduce future premium rates.
  • The CEIFB Act was suspended in 2013 and the CEIFB dissolved under the Budget legislation 2012 (no. 2).

Regulatory Amendments: New Entrants and Re-Entrants ( NERE) Pilot Project (2008)
Element Rationale
  • The NERE Pilot Project (Pilot Project No. 9) was introduced in 2005 in 23 EI regions of relatively high unemployment (10% or greater). It was renewed in 2008 as Pilot Project No. 13 in 25 EI regions with an unemployment rate of 8% or higher.
  • The pilot project reduced the number of hours NEREs needed to be eligible for EI benefits from 910 to 840.
  • Pilot Project No. 13 was allowed to sunset as scheduled on December 4, 2010.
  • Tested whether providing NEREs with less stringent EI eligibility requirements and informing them of EI employment programs improved their employability and helped reduce their future reliance on EI benefits, partly by improving their access to EI Part II measures.

Legislative and Regulatory Amendments: Quebec Parental Insurance Plan ( QPIP) (2006)
Element Rationale
  • Effective January 1, 2006, Quebec implemented the QPIP, under which Quebec residents receive maternity and parental benefits under a provincial plan, not from EI.
  • The regulations provide for interaction between the QPIP and EI, as well as a premium reduction for Quebec residents, reflecting the savings to EI.
  • Ensures consistency with EI Act provisions that provinces may provide their own benefit plans, as long as they provide benefits equivalent to those offered under EI.
  • Supported by the Supreme Court of Canada decision in the Quebec parental reference case in 2005, which confirmed the authority of the federal government to provide maternity/parental benefits under the EI head of power.

Regulatory Amendments: EI Compassionate Care Benefit (2006)
Element Rationale
  • Effective June 14, 2006, expanded the eligibility criteria for the compassionate care benefit from that of immediate family to include extended family members and others who are considered to be as family to provide greater access to the benefit.
  • Expanded the definition of family member to ensure that additional caregivers, who were previously excluded from the definition of family member, are able to get access to income support when they must leave work to care for a gravely ill family member.

Annual Premium Rate-Setting by the Canada Employment Insurance Commission: Bill C-43 (2005)
Element Rationale
  • Effective January 1, 2006, the legislation allows the Canada Employment Insurance Commission to set the premium rate under a new rate-setting mechanism.
  • In setting the rate, the Commission will take into account the principle that the premium rate should generate just enough premium revenue to cover payments to be made for that year. It will also consider the report from the EI chief actuary and any public input.
  • Allows for a new rate-setting process where the EI premium rate is determined independently by the Canada Employment Insurance Commission.

Compassionate Care Benefits: Bill C-28 (2003)
Element Rationale
Compassionate Care Benefits
  • Since January 4, 2004, compassionate care benefits have been available to help eligible family members to provide or arrange care for a gravely ill family member who faces a significant risk of death. The duration of the benefits is up to six weeks within a 26-week window.
  • Flexibility is a key feature of the benefits. Claimants can choose how and when to claim benefits within the 26-week window. Eligible family members can decide to have one person claim all six weeks or decide to share the benefit. Eligible family members can claim weeks of compassionate care benefits concurrently or consecutively.
  • Provides support to workers during temporary absences from work due to the need to provide care or support to a gravely ill family member who faces a significant risk of death within a 26-week period.

Access to Special Benefits: Bill C-49 (2002)
Element Rationale
Period to Claim Parental Benefits
  • Effective April 21, 2002, parents of a newborn or newly adopted child who is hospitalized can have their parental benefit window extended up to 104 weeks, instead of 52 weeks.
  • Provides flexibility for parents who choose to wait until their child comes home before collecting parental benefits.
Period to Claim Special Benefits
  • Effective March 3, 2002, the maximum number of combined weeks of special benefits has been increased from 50 to 65 weeks and the benefit period can be extended, under certain circumstances.
  • Ensures full access to special benefits for biological mothers who claim sickness benefits prior to and following maternity or parental benefits.
  • Responds to the ruling of the Canadian Human Rights Tribunal in the McAllister-Windsor case.

Small Weeks Provision (2001)
Element Rationale
  • This provision excluded weeks of earnings below $225 from the benefit rate calculation, potentially increasing the weekly benefit rate, but only applied to weeks with insurable earnings beyond a minimum divisor.
  • It was tested through multiple pilot projects from 1997 to 2001.
  • In November 2005, the Best 14 Weeks Pilot Project replaced this provision in pilot regions.
  • Replaced by the Variable Best Weeks provision that was introduced in 2012, except for fishers.
  • Encouraged acceptance of all available work.

A More Responsive EI Program: Bill C-2 (2001)
Element Rationale
Intensity Rule
  • Effective October 1, 2000, eliminated the Intensity Rule, which had reduced the benefit rate by 1 percentage point for every 20 weeks of EI regular benefits used in the past. The maximum reduction was 5 percentage points.
  • Eliminated an ineffective rule that had the unintended effect of being punitive.
Benefit Repayment (Clawback)
  • Applied new rule, effective retroactively to the 2000 taxation year.
    • First-time claimants of regular or fishing benefits are now exempt from the benefit repayment.
    • Claimants of special benefits (maternity, parental and sickness benefits) are no longer required to repay any of those benefits.
    • The benefit repayment threshold for regular and fishing benefits is now at one level: $48,750 of net income, with a repayment rate of 30%. The maximum repayment is the lesser of 30% of excess net income above the threshold of $48,750, or 30% of the claimant’s benefits.
  • Corrects a discrepancy, as analysis indicated that the benefit repayment provision was having a disproportionate impact on middle-income claimants.
  • Focuses on repeat claimants with high incomes.
  • Simplifies the provision.
Re-Entrant Parents
  • Effective retroactive to October 1, 2000, the rules governing new entrants/re-entrants (NEREs) have been adjusted so that claimants who are re-entering the workforce following an extended absence to raise children and who have received parental benefits are now only required to work the same number of hours as other workers to qualify for regular benefits.
  • Ensures that parents returning to the workforce following an extended absence to raise young children are not penalized.
Maximum Insurable Earnings (MIE)
  • The MIE will remain at $39,000 until average earnings exceed this level, at which time the MIE will be based on average earnings.
  • Corrects a discrepancy in which the MIE was higher than the average industrial wage.

Enhanced Parental Benefits: Bill C-32 (2000)
Element Rationale
Parental Benefits
  • Effective December 31, 2000, the duration of parental benefits has been increased from 10 to 35 weeks.
  • Helps working parents to better balance their work and family responsibilities by providing them with temporary income replacement when they take time off work to take care of their newborn in the first year of the child’s life or the first year of placement of the child (adoptive parents).
Entrance Requirements: Special Benefits
  • Effective December 31, 2000, the number of hours of insurable employment required to qualify for maternity, parental or sickness benefits has been reduced from 700 to 600 hours.
  • Improves access to special benefits.
Waiting Period
  • Effective December 31, 2000, the second parent sharing parental leave is no longer required to serve the two-week waiting period.
  • Promotes gender equality and improves flexibility by reducing the income loss for the second parent.
Allowable Earnings While on Claim
  • Effective December 31, 2000, claimants receiving parental benefits can also earn $50 or 25% of their weekly parental benefit, whichever is higher, without a loss of their EI benefits.
  • Helps low-income claimants.
  • Improves flexibility by allowing parents to work while receiving parental benefits.

Major EI Reform: Bill C-12 (1996 and 1997)
Element Rationale
Hours-Based System
  • Effective January 1997, EI eligibility is based on hours of insurable employment rather than weeks worked.
  • For regular benefits, claimants need 420 to 700 hours instead of 12 to 20 insured weeks.
  • For special benefits, claimants need 700 hours instead of 20 insured weeks.
  • Introduces a fairer and more equitable measure of time worked by making all hours count.
  • Removes inequities and anomalies of the weeks system by:
    • recognizing the intense work patterns of some employees;
    • correcting the anomaly that existed under UI, when a week of 15 hours or a week of 50 hours each counted as one week; and
    • eliminating the 14-hour job trap as, under UI, those working fewer than 15 hours (either all of the time or some of the time) with a single employer were not insured or not fully insured.
New Entrants and Re-Entrants
  • Effective July 1996, new entrants and re-entrants to the labour force needed 26 rather than 20 weeks of work to qualify for EI. In January 1997, the 26 weeks were converted to 910 hours.
  • This rule applies only to those who have had minimal or no labour market attachment over the past two years. Workers who have at least 490 hours of work in the year prior to unemployment need only 420 to 700 hours the next year to qualify for EI. Time on EI, workers’ compensation, disability benefits and sick leave counts as time worked.
  • Discourages a cycle of reliance by ensuring that workers, especially young people, develop a significant attachment to the labour force before collecting EI benefits.
  • Reintroduces insurance principles to the system by ensuring that workers make a reasonable contribution to the system before collecting benefits.
  • Strengthens the relationship between work effort and entitlement to benefits.
Reduction in Maximum Insurable Earnings (MIE)
  • The MIE was reduced to $39,000 per year ($750 per week) in July 1996 and frozen at this level until 2006. This reduced the maximum weekly benefit to $413 (55% of $750), from $448 in 1995 and $465 for the first six months of 1996.
  • Adjusted the MIE to a level where EI benefits would no longer be competitive with wages in some parts of the country and in some industries.
  • Was based on a formula that took into account average wage increases over the eight years before the reduction. Because the high inflation and wage increases of the 1980s continued to be considered in setting the MIE, it had escalated faster than wages.
Reduced Maximum Benefit Duration
  • Effective July 1996, the maximum length of a claim was reduced from 50 to 45 weeks.
  • Reflects the fact that most claimants find work within the first 40 weeks of receiving benefits.
  • Affects workers in high unemployment regions who work for long spells prior to unemployment.
Benefit Calculation
  • Weekly benefits are calculated based on total earnings over the 26-week period preceding the establishment of the claim, divided by the number of weeks of work in this period or the minimum divisor of 14 to 22 (depending on the regional rate of unemployment), whichever is higher. The result is multiplied by 55% to determine the weekly benefit.
  • Creates a strong incentive to work more than the minimum amount of time to qualify for benefits (at least two more weeks than the old entrance requirement).
  • Provides an incentive to work in the “shoulder” season.
  • Ensures a better relationship between the flow of benefits and normal earnings.
Family Supplement
  • Claimants with children and annual net family incomes of up to $25,921 receive a top-up of their basic insurance benefits.
  • The Family Supplement increased the maximum benefit rate to 65% in 1997, to 70% in 1998, to 75% in 1999 and to 80% in 2000.
  • Improves assistance to those most in need, because:
    • the old 60% dependant rate under UI was very poorly targeted—about 45% of low-income families did not qualify; and
    • about 30% of those who did receive the 60% rate had family incomes over $45,000.
Allowable Earnings While on Claim
  • Effective January 1997, claimants can earn $50 or 25% of their weekly benefit, whichever is higher, without a loss of their EI benefits.
  • Helps low-income claimants.
  • Encourages claimants to maintain work attachment and increase their earnings from work.
Benefit Repayment (Clawback)
  • Benefits were repaid at the rate of $0.30 for every $1 of net income above the threshold.
  • For those who had collected 20 or fewer weeks of benefits in the last five years, the threshold was $48,750 of net income (the former level was $63,570). The maximum repayment remained at 30% of benefits received.
  • For those with more than 20 weeks of benefits in the last five years, the threshold was $39,000 of net income. The maximum repayment varied from 50% to 100% of benefits received, depending on previous use.
  • Made benefits fairer and more accurately reflective of insurance principles.
  • Discouraged repeated use of EI by those with high levels of annual income.
  • The Benefit Repayment provision was revised in Bill C-2 (2001).
Intensity Rule
  • The intensity rule reduced the benefit rate by 1 percentage point for every 20 weeks of regular or fishing benefits collected in the past five years.
  • The maximum reduction was 5 percentage points.
  • Introduced an element of experience rating to the program, since heavy users of the system bore more of the costs.
  • Discouraged use of EI as a regular income supplement rather than insurance for times of unpredictable job loss, while not excessively penalizing those who made long or frequent claims.
  • Created a better balance between contributions made and benefits received.
  • Repealed in Bill C-2 (2001).
First-Dollar Coverage
  • Effective January 1997, all earnings from the first dollar are insurable up to the annual MIE. There are no weekly minimums or maximums for determining earnings.
  • Creates a more equitable and balanced system—all earnings are insurable.
  • Decreases paper burden for employers.
  • Helps guard against “gaming” the system to avoid paying premiums.
Premium Refunds
  • Since 1997, workers earning $2,000 or less per year have had their premiums refunded.
  • Helps workers who must pay premiums but do not have enough hours to qualify for benefits.
Increased Sanctions for Fraud
  • Effective July 1996, penalties for fraud by employers and claimants were increased.
  • Since January 1997, claimants who committed fraud after June 1996 have faced higher entrance requirements.
  • Protects the integrity of the EI program.
Part II of the Employment Insurance Act: Employment Benefits and the National Employment Service
  • Part II of the Employment Insurance Act provides authority for three types of arrangements for employment program implementation and delivery with support from EI funds.
  • The Canada EI Commission is authorized to:
    • establish federal employment programs, coupled with a duty to work with provincial governments regarding their design, delivery and evaluation;
    • Authority for the Commission to enter into agreements for the administration on its behalf of its employment benefits and support measures; and
    • Authority to enter into agreements with provinces and other entities to contribute toward the costs of their similar benefits and measures/programs (Labour Market Development Agreements).

Annex 7.2 - Economic Action Plan (EAP) Temporary Employment Insurance (EI) Measures

Budget Implementation Act: Bill C-3 and C-13 (2011)
Element Rationale
Changes to the Work-Sharing Program
  • Allowed for an extension of up to 16 weeks, to a maximum of 42 weeks, to active and recently terminated agreements.
  • This extension was retroactive to March 20, 2011, and ended on October 29, 2011.
  • It introduced adjustments to make the program more flexible and efficient for employers: a simplified recovery plan, more flexible utilization rules and technical amendments to reduce administrative burden.
  • These adjustments became effective on April 4, 2011.
  • Gave businesses and workers additional support to avoid potential layoffs.
Temporary Hiring Credit for Small Businesses
  • Provided small businesses with a temporary hiring credit of up to $1,000 against an increase in the firm’s 2011 EI premiums over those paid in 2010.
  • Available to approximately 525,000 employers whose total EI premiums were at or below $10,000 in 2010 and will reduce their 2011 payroll costs by about $165 million.
  • Encouraged additional hiring in small businesses, and helped them to take advantage of emerging opportunities and compete in the global economy.

Additional Changes to the Work-Sharing Program: Bill C-9 (2010)
Element Rationale
Changes to the Work-Sharing Program
  • Allowed active and recently terminated agreements to be extended for an additional 26 weeks, up to a maximum of 78 weeks.
  • Maintained previous changes that improved the flexibility of qualifying criteria for new agreements and streamlined the process for employers.
  • These enhancements were in place until April 2, 2011.
  • Gave businesses and workers additional support to avoid potential layoffs.

Increased Benefits for Long-Tenured Workers: Bill C-50 (2009)
Element Rationale
Temporary Additional EI Benefits for Unemployed Long-Tenured Workers
  • Long-tenured workers are individuals who have worked and paid EI premiums for a significant period and have previously made limited use of EI regular benefits.
  • Provided up to 20 weeks of additional benefits, depending on how long an eligible individual had been working and paying into EI.
  • Applied to claimants who met the long-tenured worker definition and who made their claim between January 4, 2009, and September 11, 2010.
  • Benefited workers who faced unemployment with low prospects of finding work and who had previously made limited use of EI benefits.
  • Helped workers who, in many cases, had skills that were not easily transferable. For such workers, finding a new job in their industry or an alternative one may have been particularly difficult in the economic environment of that time period.

Additional Support for the Unemployed— Budget Implementation Act: Bill C-10 (2009)
Element Rationale
Five-Week Extension of EI Regular Benefits
  • Effective on March 31, 2009, eligible claimants were automatically eligible for five additional weeks of regular benefits.
  • It affected all claims active or starting between March 1, 2009, and September 11, 2010.
  • Provided all EI regular benefit claimants with additional financial support while they searched for new employment.
Career Transition Assistance Initiative
  • Two measures to support long-tenured workers.
    • The Extended Employment Insurance and Training Incentive (EEITI) extended EI regular benefits to a maximum of 104 weeks for EEITI participants, including up to 12 weeks of EI regular benefits for job search.
    • The Severance Investment for Training Initiative removed restrictions on EI regular benefits for all eligible claimants who invested part or all of their separation monies in eligible training.
  • For the purposes of the Career Transition Assistance Initiative, long-tenured workers’ claims must have started on or after January 25, 2009, and no later than May 29, 2010.
  • Improved claimants’ incentive to renew or upgrade their skills.
  • Encouraged claimants to invest in their own training.
  • Encouraged claimants to undertake long-term training to improve their re-employability.
Changes to the Work-Sharing Program
  • Increased the maximum agreement duration by 14 weeks, to a maximum of 52 weeks, for applications received between February 1, 2009, and April 3, 2010.
  • It also improved access to work-sharing agreements by making the qualifying criteria more flexible and streamlining processes for employers.
  • Gave businesses and workers additional support to avoid potential layoffs.
Premium Rate Freeze
  • This measure froze EI premium rates for employees at $1.73 per $100 for 2010, the same rate as in 2009 and 2008.
  • Maintained premium rate stability during the recession despite higher EI costs.
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