Employment Insurance Monitoring and Assessment Report 2014/2015   Chapter II - 6. Employment Insurance benefits and firms

6. Employment Insurance benefits and firms Footnote 162

This section gives a profile of EI claimants by firms’ characteristics and provides updated data on the Hiring Credit for Small Business measure. Section 6.1 provides an overall overview of the number of firms with employees receiving EI benefits. Section 6.2 focuses on firms and employees receiving regular benefits while section 6.3 analyzes firms with employees receiving special benefits. In addition, section 6.4 provides analysis on the impact of the Hiring Credit for Small Business that was introduced in Budget 2011 and extended in Budget 2013.

6.1 Firms with employees receiving Employment Insurance benefits

The number of firms Footnote 163 operating in Canada in 2013 remained relatively stable, decreasing by only 0.2% to 1,164,500 from 1,166,700.

The proportion of firms with an employee receiving EI benefits decreased by 1.1 percentage point to 32.3% in 2013. Footnote 164 There was also a decline in the proportion of firms with at least one employee receiving EI regular benefits in 2013 (26.4%) compared to 2012 (27.7%). These decreases were largely driven by improving labour market conditions in the post-recession period.

Firms with employees receiving EI benefits accounted for 86.7% of total employment in 2013, compared to 87.0% in 2012. This decline is driven by the fact that firms with employees receiving EI regular benefits accounted for 81.9% of total employment, down from 82.5% in 2012.

Overall, these findings point to the fact that while the number of firms remained relatively stable in 2013, firms laid off a smaller proportion of their employees in 2013 than they did in 2012.

6.2 Firms and Employment Insurance regular benefits

Employers’ utilization of EI regular benefits in 2013 can be examined based on the geographic location by province or territory, on the size of their firms and on their type of industries. Analysis in this section examines EI regular benefits which account for the majority of EI benefits paid (64.5% in 2014/2015).

6.2.1 Firms and Employment Insurance Regular Benefits, by Firm Location

Table 62 shows that in 2013 87.0% of firms in Canada were located in Ontario, Quebec, British Columbia and Alberta. Comparing the provincial and territorial distribution of firms (column 1) to that of their workforce (column 2), we see that British Columbia and Alberta were overrepresented in their number of firms, while Ontario and Quebec were underrepresented, indicating that firms in Ontario and Quebec are relatively larger in terms of their workforce than firms in other provinces.

Table 62 also shows that the Atlantic provinces and Quebec were overrepresented as EI regular claimants (column 3) compared to their workforce (column 2). For example, while the Atlantic provinces represented 12.4% of EI regular claimants, they only accounted for 5.9% of the workforce. All other provinces were underrepresented when comparing their workforce to their EI regular claimants.

Comparing the distribution of EI regular claimants based on where their firm is located (column 3) and where they resided (column 4) indicates that individuals employed by firms in Ontario and Alberta were overrepresented relative to where the individuals resided. In 2013, 33.6% of EI regular claimants worked for a firm located in Ontario while only 30.2% of EI regular claimants resided in that province. Similarly, Alberta firms represented 8.4% of EI regular claimants compared to 6.4% of EI regular claimants who resided in Alberta. All other provinces were underrepresented.

Table 62 - Firms, Employment and Employment Insurance Regular Claimants, by Province and Territory, Canada, 2013
Province and Territory Distribution of Firms1 Distribution of the Firm’s Workforce1,2 Distribution of the Firm’s EI Regular Claimants1,3 Distribution of EI Regular Claimants (Based on Residence)4
Newfoundland and Labrador 1.5% 1.2% 3.4% 4.7%
Prince Edward Island 0.4% 0.4% 0.9% 1.2%
Nova Scotia 2.3% 2.5% 3.9% 4.5%
New Brunswick 2.0% 1.8% 4.2% 5.3%
Quebec 20.1% 22.4% 30.4% 31.8%
Ontario 36.4% 41.6% 33.6% 30.2%
Manitoba 3.2% 3.2% 2.5% 2.7%
Saskatchewan 3.4% 2.6% 1.7% 2.1%
Alberta 15.2% 12.2% 8.4% 6.4%
British Columbia 15.4% 11.7% 10.5% 10.7%
Yukon 0.1% 0.1% 0.2% 0.1%
Northwest Territories 0.1% 0.1% 0.2% 0.1%
Nunavut 0.0% 0.1% 0.1% 0.1%
Canada 100.0% 100.0% 100.0% 100.0%
  • Note: Totals may not add up due to rounding.
  • 1 The location of the firm, the firm’s workforce and the firm’s EI regular claimants are based on the location of the firm’s headquarters, which is determined by the Business Register of Statistics Canada. If the firm’s headquarters is located outside Canada, then the location of the firm is based on the location of the job based on T4 data.
  • 2 The number of workers in a firm is the number of individuals with employment income in that firm, as indicated on a T4 form. The number of workers is adjusted so that each individual in the labour force is only counted once and individuals who work for more than one firm are taken into account. For example, if an employee earned $25,000 in firm 1 and $25,000 in firm 2, then he or she was recorded as 0.5 employee at the first firm and 0.5 employee at the second firm.
  • 3 These are the number of people receiving EI regular benefits in 2013.
  • 4 The residence-based location of an EI regular claimant is where the EI claimant resided when he or she filed for a claim.
  • Source: ESDC, Employment Insurance administrative data. Data are based on a 100% sample of EI data; CRA administrative data. CRA data are based on a 100% sample.

6.2.2 Firms and Employment Insurance Regular Benefits, by Firm Size

Small-sized firms represented 90.7% of all firms in Canada in 2013. Footnote 165 The remainder of the firms were small-to-medium-sized firms (7.8%), medium-to-large-sized firms (1.3%) and large-sized firms (0.3%). These figures are similar to those of 2012.

Table 63 indicates that workers in large-sized firms were underrepresented among EI regular claimants as they represented 43.1% of workers but only 30.5% of EI regular claimants. All other categories of firms were overrepresented among EI regular claimants. For example, small-sized firms represented 21.7% and 27.7% of workers and EI regular claimants, respectively. These results are similar to those of the last two years.

Table 63 - Firms, Employment and Employment Insurance Regular Claimants, by Size of Firms, Canada, 2013
Size of Firms Distribution of Firms1 Distribution of the Firm’s Workforce1,2 Distribution of the Firm’s EI Regular Claimants1,3
Small 90.7% 21.7% 27.7%
Small-Medium 7.8% 19.4% 24.6%
Medium-Large 1.3% 15.8% 17.2%
Large 0.3% 43.1% 30.5%
Canada 100.0% 100.0% 100.0%
  • Note: Totals may not add up due to rounding.
  • 1The location of the firm, the firm’s workforce and the firm’s EI regular claimants is based on the location of the firm’s headquarters, which is determined by the Business Register of Statistics Canada. If the firm’s headquarters is located outside Canada, then the location of the firm is based on the location of the job based on T4 data.
  • 2The number of workers in a firm is the number of individuals with employment income in that firm, as indicated on a T4 form. The number of workers is adjusted so that each individual in the labour force is only counted once and individuals who work for more than one firm are taken into account. For example, if an employee earned $25,000 in firm 1 and $25,000 in firm 2, then he or she was recorded as 0.5 employee at the first firm and 0.5 employee at the second firm.
  • 3 These are the number of people receiving EI regular benefits in 2013.
  • Source: ESDC, EI administrative data. Data are based on a 100% sample of EI data; CRA administrative data. CRA data are based on a 100% sample.

EI regular benefits were received by employees of 20.9% of small-sized firms in 2013. In comparison, 76.8%, 96.0% and 99.5% of small-to-medium, medium-to-large and large-sized firms had employees who received EI regular benefits, respectively.

In addition, among firms with employees who were in receipt of EI regular benefits, roughly one-third of employees (31.5%) in small-sized firms received EI regular benefits. With 14.4% of employees receiving regular benefits, small-to-medium firms also recorded figures above the national average of 11.2%. Although almost all medium-to-large and large-sized firms had employees in receipt of EI regular benefits in 2013, 10.3% and 6.5% of workers in these firms received EI regular benefits, respectively. These figures are consistent with those of 2012.

Overall, this analysis of the utilization of EI regular benefits by firm size suggests that various factors contribute to the overrepresentation of small and underrepresentation of large firms among firms with EI regular benefit claimants. In the case of smaller firms, it may be due to the fact that fewer smaller firms utilized EI regular benefits; however, given their small size, it is more likely that a higher proportion of their employees will be in receipt of EI regular benefits. Meanwhile, there is a higher probability that larger firms will have employees who are in receipt of EI regular benefits, but they will represent a smaller percentage of their employees.

6.2.3 Firms and Employment Insurance Regular Benefits, by Industry

Analysis by industry shows discrepancies between distribution of firms, distribution of firm’s workforce and distribution of firm’s EI regular claimants. Table 64 shows that firms in the Construction industry, the Business, Building and Other Support Services industry and the Other Services industry represented 12.4%, 12.4% and 9.7% of all firms in Canada in 2013. The goods-producing industries represented 22.0% of all firms while Services-producing industries accounted for the remaining 78.0%.

Workers in the goods-producing sector were overrepresented as EI regular claimants: while they represented 20.1% of workers, they accounted for 38.0% of EI regular claimants. The overrepresentation of EI regular claimants in the goods-producing industries is mainly driven by the Construction industry: while they represented 6.9% of the workforce, they accounted for 20.1% of EI regular claimants in 2013. To a lesser extent, workers in the Manufacturing industry and in the Agriculture, Fishing, Forestry and Hunting industry were also overrepresented as EI regular claimants with 9.4% and 1.7% of workers and 11.5% and 4.1% of EI regular claimants, respectively.

By contrast, workers from the services-producing sector were underrepresented as EI regular claimants in 2013 with only 62.0% of EI regular claimants but 79.9% of workers. More specifically, workers in the Public Administration industry, the Retail Trade industry and in Information, Cultural and Recreation industry represented 9.8%, 11.4% and 8.3% of workers but only 5.1%, 7.0% and 4.1% of EI regular claimants, respectively.

Table 64 - Firms, Employment and Employment Insurance Regular Claimants, by Industry, Canada, 2013
Industry Distribution of Firms1 Distribution of the Firm’s Workforce1,2 Distribution of the Firm’s EI Regular Claimants1,3
Goods-Producing Industries 22.0% 20.1% 38.0%
Agriculture, Forestry, Fishing And Hunting 4.5% 1.7% 4.1%
Mining and Oil and Gas Extraction 0.8% 1.4% 1.9%
Utilities 0.1% 0.7% 0.4%
Construction 12.4% 6.9% 20.1%
Manufacturing 4.3% 9.4% 11.5%
Services-Producing Industries 78.0% 79.9% 62.0%
Wholesale Trade 4.2% 4.7% 3.9%
Retail trade 8.9% 11.4% 7.0%
Transportation and Warehousing 5.4% 4.1% 4.3%
Finance and Insurance 2.6% 3.6% 3.5%
Real Estate and Rental and Leasing 2.6% 3.9% 1.4%
Professional, Scientific and Technical Services 4.3% 1.7% 1.5%
Business, Building and Other Support Services4 12.4% 5.6% 4.4%
Educational Services 5.4% 7.1% 7.9%
Health care and Social Assistance 1.1% 7.3% 9.1%
Information, Cultural and Recreation5 8.4% 8.3% 4.1%
Accommodation and Food Services 6.3% 7.5% 5.4%
Other Services (except Public Administration) 9.7% 4.0% 3.5%
Public Administration 0.5% 9.8% 5.1%
Unclassified 5.9% 0.8% 0.9%
Canada 100.0% 100.0% 100.0%
  • Note: Totals may not add up due to rounding.
  • 1 The location of the firm, the firm’s workforce and the firm’s EI regular claimants is based on the location of the firm’s headquarters, which is determined by the Business Register of Statistics Canada. If the firm’s headquarters is located outside Canada, then the location of the firm is based on the location of the job based on T4 data.
  • 2 The number of workers in a firm is the number of individuals paid employment income by that firm, as indicated on a T4 form. The number of workers is adjusted so that each individual in the labour force is only counted once and individuals who work for more than one firm are taken into account. For example, if an employee earned $25,000 in firm 1 and $25,000 in firm 2, then he or she was recorded as 0.5 employee at the first firm and 0.5 employee at the second firm.
  • 3 These are the number of people receiving EI regular benefits in 2013.
  • 4 This industry comprises the industries with codes 55 (Management of Companies and Enterprises) and 56 (Administrative and Support, Waste Management and Mediation Services) from the North American Industry Classification System.
  • 5 This industry comprises the industries with codes 51 (Information and Cultural Industries) and 71 (Arts, Entertainment and Recreation) from the North American Industry Classification System.
  • Source: ESDC, EI administrative data. Data are based on a 100 % sample of EI data; CRA administrative data. CRA data are based on a 100% sample.

6.3 Firms and Employment Insurance special benefits

Analysis in this section examines EI special benefits which accounted for 31.3 % of EI benefits paid in 2014/2015.

6.3.1 Firms and Employment Insurance Special Benefits, by Firm Location

Comparing the distribution of the workforce to EI special claimants, Table 65 shows that the Atlantic provinces were overrepresented as EI special claimants with 9.2 % versus 5.9 % of the workforce. As opposed to regular claimants (see section 6.2.1), Quebec is underrepresented as EI special claimants. This is explained by the fact that Quebec administers its own program for maternity and parental benefits.

Similarly to what was observed in section 6.2.1, comparing distribution of EI special claimants based on where their firm is located and where they resided indicates that individuals employed by firms in Ontario and Alberta were overrepresented relative to where the individuals resided. In 2013, 43.1 % of EI special claimants worked for a firm located in Ontario while only 35.5 % of them resided in Ontario. To a lesser extent, Alberta firms represented 11.0 % of EI special claimants compared to 10.7 % of EI special claimants residing in Alberta. All other provinces were underrepresented, especially Quebec: 17.4 % of EI special claimants worked for a firm located in that province while 20.6 % of EI special claimants resided there.

Table 65 - Firms, Employment and Employment Insurance Special Claimants, by Province and Territory, Canada, 2013
Province and Territory Distribution of Firms1 Distribution of the Firm’s Workforce1,2 Distribution of the Firm’s EI Special Claimants1,3 Distribution of EI Special Claimants (Based on Residence)4
Newfoundland and Labrador 1.5% 1.2% 1.7% 2.3%
Prince Edward Island 0.4% 0.4% 0.7% 1.1%
Nova Scotia 2.3% 2.5% 3.4% 4.2%
New Brunswick 2.0% 1.8% 3.4% 4.9%
Quebec 20.1% 22.4% 17.4% 20.6%
Ontario 36.4% 41.6% 43.1% 35.5%
Manitoba 3.2% 3.2% 3.4% 3.7%
Saskatchewan 3.4% 2.6% 2.6% 2.9%
Alberta 15.2% 12.2% 11.0% 10.7%
British Columbia 15.4% 11.7% 13.0% 13.7%
Yukon 0.1% 0.1% 0.1% 0.1%
Northwest Territories 0.1% 0.1% 0.1% 0.2%
Nunavut 0.0% 0.1% 0.1% 0.1%
Canada 100.0% 100.0% 100.0% 100.0%
  • Note: Totals may not add up due to rounding.
  • 1 The location of the firm, the firm’s workforce and the firm’s EI special claimants is based on the location of the firm’s headquarters, which is determined by the Business Register of Statistics Canada. If the firm’s headquarters is located outside Canada, then the location of the firm is based on the location of the job based on T4 data.
  • 2 The number of workers in a firm is the number of individuals paid employment income by that firm, as indicated on a T4 form. The number of workers is adjusted so that each individual in the labour force is only counted once and individuals who work for more than one firm are taken into account. For example, if an employee earned $25,000 in firm 1 and $25,000 in firm 2, then he or she was recorded as 0.5 employee at the first firm and 0.5 employee at the second firm.
  • 3 These are the number of people receiving EI special benefits in 2013.
  • 4 The residence-based location of an EI special claimant is where the EI claimant resided when he or she filed for a claim.
  • Source: ESDC, EI administrative data. Data are based on a 100 % sample of EI data; CRA administrative data. CRA data are based on a 100 % sample.

6.3.2 Firms and Employment Insurance Special Benefits, by Firm Size

As seen in section 6.2.2, small-sized firms represented 90.7% of all firms in Canada in 2013, Footnote 166 while large-sized firms represented only 0.3% of firms. Whereas section 6.2.2 showed large differences in the distribution of the workforce and EI regular claimants, Table 66 indicates that the picture differs for EI special claimants. The distribution of the firm’s workforce and EI special claimants were pretty similar by firm size, the largest percentage point difference (2.6) coming from small-sized firms.

While large firms were slightly underrepresented among EI special claimants (43.1% of the workforce vs 42.3% of EI special claimants), the magnitude of the underrepresentation was much lower than that found under EI regular claimants. Small firms were underrepresented among EI special claimants: while they represented 21.7% of workers, they represented only 19.1% of EI special claimants. Small-to-medium sized firms and medium-to-large firms were overrepresented among EI special claimants, as was the case for EI regular claimants (see section 6.2.2).

Table 66 - Firms, Employment and Employment Insurance Special Claimants, by Size of Firm, Canada, 2013
Size of Firm Distribution of Firms1 Distribution of the Firm’s Workforce1,2 Distribution of the Firm’s EI Special Claimants1,3
Small 90.7% 21.7% 19.1%
Small-Medium 7.8% 19.4% 21.0%
Medium-Large 1.3% 15.8% 17.5%
Large 0.3% 43.1% 42.3%
Canada 100.0% 100.0% 100.0%
  • Note: Totals may not add up due to rounding.
  • 1 The location of the firm, the firm’s workforce and the firm’s EI special claimants is based on the location of the firm’s headquarters, which is determined by the Business Register of Statistics Canada. If the firm’s headquarters is located outside Canada, then the location of the firm is based on the location of the job based on T4 data.
  • 2 The number of workers in a firm is the number of individuals paid employment income by that firm, as indicated on a T4 form. The number of workers is adjusted so that each individual in the labour force is only counted once and individuals who work for more than one firm are taken into account. For example, if an employee earned $25,000 in firm 1 and $25,000 in firm 2, then he or she was recorded as 0.5 employee at the first firm and 0.5 employee at the second firm.
  • 3 These are the number of people receiving EI special benefits in 2013.
  • Source: ESDC, EI administrative data. Data are based on a 100% sample of EI data; CRA administrative data. CRA data are based on a 100% sample.

In summary, the section on firms has revealed several interesting facts: 1) large firms were well underrepresented when comparing the distribution of the workforce to that of EI regular claimants, while the opposite holds true for small-sized firms; 2) goods-producing industries were overrepresented as EI regular claimants compared to their workforce, while services-producing industries were underrepresented; and 3) large discrepancies exist between the distribution of firms’ workforce and the distribution of EI special claimants by province.

6.4 Firms and temporary hiring credit for small business

In recognition of the challenges small businesses were facing across the country, Budget 2011 announced a temporary Hiring Credit for Small Business (HCSB) for two years. Employers whose EI premiums were $10,000 or less in 2010 received a refund for any increase in their 2011 EI premiums over those paid in 2010, up to a maximum of $1,000. This measure also applied for 2012 EI premiums.

Budget 2013 extended the temporary credit for one more year, and expended it to employers whose EI premiums were $15,000 or less in 2012, with a maximum credit of $1,000.

In 2013, 562,870 businesses received the HCSB at a total cost of $235.3M (see Table 67). This figure compares to 554,146 businesses at a total cost of $219.2M in 2012. The average credit for businesses was $418 in 2013 compared to $396 in 2012. In addition, 107,707 businesses received the maximum credit of $ 1,000 in 2013 compared to 92,368 such businesses in 2012. In 2011, 552,043 businesses received the credit at a cost of $210.4M. Businesses received in average $381 in credit and 87,055 got the maximum credit of $1,000 in 2011.

Table 67 - Temporary Hiring Credit for Small Business, Canada, 2011 to 20131
HCSB 2011 2012 2013
Total Credits (in millions of dollars) 210.4 219.2 235.3
Employers Receiving Credit 552,043 554,146 562,870
Average Credit $381 $396 $418
Employers Getting the Maximum Credit of $1,000 87,055 92,368 107,707
  • 1 Figures are as of February 29, 2016.
  • Source: CRA administrative data. CRA data are based on a 100% sample of T4 file.
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