EI Monitoring and Assessment Report 2012/13 Chapter 2: Impacts and Effectiveness of Employment Insurance Part I

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

This chapter examines the usage, impacts and effectiveness of Employment Insurance (EI) income benefits under Part I of the Employment Insurance Act.

Section I analyses total income benefits, which combine all EI benefit types (regular, fishing, special and Work-Sharing benefits). Section II examines income support provided by EI regular benefits to individuals who lost their jobs through no fault of their own. Section III discusses EI fishing benefits paid to self-employed fishers. Section IV examines the role EI plays in helping Canadians balance work commitments with family responsibilities and personal illnesses through EI special benefits, which include maternity, parental, sickness and compassionate care benefits. Section V discusses EI Work-Sharing benefits, which help employers and employees avoid temporary layoffs when business activity declines below normal levels. Section VI profiles firms and their employees usage of EI income benefits. Finally, section VII provides general information on EI finances.

Unless otherwise indicated, numerical figures, tables and charts in this chapter are based on a 10% Footnote 1 sample of EI administrative data. Throughout the chapter, data for 2012/13 are compared with data from previous years and, in some instances, long-term trends are discussed. Footnote 2 More data on the benefits discussed in this chapter can be found in Annex 2. Beyond the discussion of usage (claims Footnote 3 and benefits paid Footnote 4 ), this chapter also provides different measures that analyses the support provided by EI part I benefits.

In this report, the main source used to examine coverage of, eligibility for and accessibility to EI benefits among unemployed people is Statistics Canadas Employment Insurance Coverage Survey. In addition, data from the Labour Force Survey are used to explore eligibility for EI benefits among the employed population. Supplementary analysis of job separations from Records of Employment is also provided in this chapter.

This chapter also analyses the support providedEI Part I benefits by reporting on various indicators, including the level of, entitlement to, duration of, exhaustion of and income redistribution from benefits. The level of benefits indicates the generosity of benefits, usually expressed as the average weekly benefit. Entitlement is the maximum number of weeks of benefits payable, which varies depending on the benefit type being discussed. Duration is the average number of benefit weeks that claimants actually use. Exhaustion occurs for two reasons – claims for which all eligible regular weeks have been paid and claims that have reached the final week of the benefit period before all eligible regular benefits have been paid. Finally, income redistribution transfers income from high earners to low earners and from provinces and regions of low unemployment to provinces and regions of high unemployment.

In addition, throughout the chapter, several key EI provisions and pilot projects are discussed. EI provisions (permanent features of the EI program) are legislated, while pilot projects are temporary measures that modify or replace existing provisions. EI pilot projects are used to test and assess the labour market impacts of new approaches before considering a permanent change to EI. Through these provisions and pilots, the program strives to find a balance between providing adequate income benefits and encouraging work attachment. It does so by providing incentives for EI claimants to work more before establishing a claim, as well as to work while on claim.

This chapter also discusses changes to the EI program introduced through Economic Action Plans 2012 and 2013. The changes to the EI program included the Connecting Canadians to Available Jobs initiative, which clarified EI claimants responsibilities to undertake a reasonable job search; the Variable Best Weeks approach to calculating the weekly EI benefit rate; and the new Working While on Claim (WWC) pilot project. Economic Action Plan 2013 also extended the temporary Hiring Credit for Small Business for one year; it provides a credit of up to $1,000 against a small employers increase in 2013 EI premiums over those paid in 2012.

For a detailed overview of major changes to the EI program from January 1996 to March 2013, please refer to Annex 7 of the report.

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