Employment Insurance Monitoring and Assessment Report 2014/2015Chapter II - Impacts and effectiveness of Employment Insurance benefits (Part I of the Employment Insurance Act)

This chapter examines the usage, impact and effectiveness of Employment Insurance benefits that were paid under Part I of the Employment Insurance Act during the 2014-2015 fiscal year. Footnote 1

Section 1 analyzes total Employment Insurance (EI) benefits, which is comprised of all benefit types as a whole, namely regular benefits, fishing benefits, special benefits (maternity, parental, sickness, compassionate care and parents of critically ill children benefits, which include those paid to self-employed persons) and work-sharing benefits. Section 2 examines income support provided by regular benefits to unemployed individuals who lost their job for reasons beyond their control. Section 3 discusses fishing benefits paid to self-employed fishers. Section 4 examines the role EI plays in helping Canadian workers balance work commitments with family responsibilities and personal illnesses by providing special benefits. Section 5 discusses work-sharing benefits, which help employers and employees avoid temporary layoffs when business activity declines below normal levels. Section 6 profiles firms and their employees’ usage of EI benefits. Finally, section 7 provides general information on EI program finances.

This chapter assesses the income support provided by EI Part I benefits by reporting on various indicators, including the number of new claims established, amount paid, level of benefits, maximum duration and actual duration of benefits, exhaustion of benefits, and the impact of benefits on income redistribution. The number of new claims established Footnote 2 and amount paid indicate the way in which Canadians use the program and the amount of transfer payment they receive. The level of benefits is essentially an indicator of the generosity of benefits, usually expressed as the weekly benefit rate. Maximum duration of benefits corresponds to the maximum number of weeks of benefits payable, which varies depending on the benefit type, while actual duration is the number of weeks of benefits a claimant actually receives. Footnote 3 Exhaustion occurs for two reasons–all of a claimant’s entitled weeks of benefits have been paid, or the final week of the claimant’s benefit period (generally a 52-week period) is reached before all payable benefit weeks 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, key EI program provisions and pilot projects are discussed. EI program provisions (permanent features of the EI program) are either a part of legislation or regulations, while pilot projects are temporary regulatory measures that modify or replace some of the program’s provisions. EI pilot projects are used to test and assess the labour market impacts of new approaches before considering a permanent change to the EI program. More specifically, EI pilot projects are used to determine which possible amendments to the Employment Insurance Act or its regulations would make them more consistent with current industry employment practices, trends or patterns or would improve service to the public.

Lastly, this chapter discusses recent changes to the EI program and their impact. The changes include the Variable Best Weeks approach to calculating the rate of weekly EI benefits; the Working While on Claim (WWC) pilot project; changes to EI economic regions, which led to the creation of new regions in Prince Edward Island and the territories, and changes to the methodology to determine the regional unemployment rate in the territories; the Connecting Canadians to Available Jobs initiative, which clarified EI claimants’ responsibilities to undertake a reasonable job search; new benefits for parents of critically ill children, which have been available since June 9, 2013; and greater flexibility for people receiving parental benefits, compassionate care benefits or benefits for parents of critically ill children to receive sickness benefits (since March 24, 2013, in the case of parental benefits, and since October 12, 2014, in the case of compassionate care or parents of critically ill children benefits).

This chapter relies on several sources of information to provide a comprehensive analysis of the EI program. EI administrative data is the main source of data used. Numerical figures, tables and charts in this chapter are generally based on a 10% sample of EI administrative data. However, due to the relatively limited number of fishing claims, compassionate care claims, claims for parents of critically ill children and work-sharing claims, and to ensure the quality of data, elements of analysis related to these four types of benefits are sometimes based on the total (100%) of EI administrative data, with the exception of amount paid, which is based on a 10% sample. Furthermore, when results regarding firms (i.e. employers) are presented, data is generally based on all EI administrative data. Throughout the chapter, data for 2014/2015 are compared with data from previous years and, in some instances, long-term trends are discussed. Footnote 4

For some analyses, tax data from the Canada Revenue Agency was used; normally, this is based on a 10% sample of data related to T4 slips with employment income or T1 returns. The main source used to examine coverage of, eligibility for and accessibility of unemployed people to EI benefits is Statistics Canada’s Employment Insurance Coverage Survey. In addition, data from the Labour Force Survey, also carried out by Statistics Canada, are used to explore the employed population’s eligibility to EI benefits or to highlight the unemployment rate’s impact on EI economic regions and in Canada.

Annex 2 of the report presents additional statistical information on benefits analyzed in this chapter, while Annex 7 provides a detailed overview of major changes to the EI program implemented between April 1996 and December 2015. Lastly, Section 1 of the Program Overview (which precedes Chapter I) contains more information on key EI provisions with regard to access requirements, maximum duration of benefits and level of benefits.

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