Employment Insurance Monitoring and Assessment Report for the fiscal year beginning April 1, 2016 and ending March 31, 2017
Chapter II - Impact and Effectiveness of Employment Insurance Benefits (Part I of the Employment Insurance Act)

On this page

• 1. Employment Insurance benefits overview
  • 1.1 Employment Insurance claims, amount paid and level of benefits
  • 1.2 Combined Employment Insurance claims
  • 1.3 Benefits-to-Contributions ratios

1. Employment Insurance benefits overview

The Employment Insurance (EI) program provides income support to partially replace employment income for eligible unemployed contributors to the program while they look for new employment or upgrade their skills and for those who are absent from work due to specific life circumstances (such as sickness, pregnancy, or caregiving for a newborn, a newly adopted child, a critically ill child or a gravely ill family member with a significant risk of death).

In this chapter, EI benefits include regular benefits, fishing benefits, Work-Sharing benefits as well as special benefits, which include maternity benefits, parental benefits, sickness benefits, compassionate care benefits and benefits for Parents of Critically Ill Children. Subsection 1.1 covers the number of new claims established in the fiscal year, total amount paid over the fiscal year, and benefit levels of claims established. Subsection 1.2 examines combined (or mixed) benefit claims. Subsection 1.3 provides an analysis of the usage of EI benefits relatively to EI contribution premiums.

1.1 Employment Insurance claims, amount paid and level of benefits

For the period starting on April 1, 2016 and ending on March 31, 2017 (FY1617), the number of new EI claims established decreased by 5.6% (-107,100) to 1.8 million new EI claims. This decrease almost completely offset the increase observed in new claims during the previous reporting period (+116,600). Total EI benefit payments increased by $799.0 million (+4.5%) to reach $18.5 billion, the highest level recorded since the $19.4 billion recorded in FY0910 (see Chart 1).

Text description of chart 1

	Employment Insurance claims (left scale)	Amount paid in Employment Insurance benefits (right scale)
	Million	$ Billion
2008/2009	2.1	$14.2
2009/2010	2.2	$19.4
2010/2011	1.8	$17.3
2011/2012	1.9	$15.7
2012/2013	1.8	$15.2
2013/2014	1.8	$15.4
2014/2015	1.8	$15.8
2015/2016	1.9	$17.7
2016/2017	1.8	$18.5

As highlighted in Chapter 1, a downturn in commodity prices significantly impacted the labour market in recent years. In response to this downturn, the Government introduced a temporary measure to extend the benefits in the 15 most impacted EI economic regions. The temporary measure introduced on July 3, 2016 applied to anyone who started a claim for EI regular benefits on or after January 4, 2015 and was still unemployed at the time the measure came into force or during the year following its implementation. It had an impact on the number of claims and the amounts of benefits paid as fewer claims were established in FY1617 because eligible claimants could claim more weeks of benefits and for a longer period of time while the amount of benefits paid in the regions affected by the measure increased significantly. The effects of this measure are therefore reflected throughout most of this chapter and will be discussed in greater details in subsection 2.2.4.

According to Statistics Canada, there were 826,300 beneficiaries receiving EI benefits on average each month in FY1617, an increase of 3.6% from 797,300 beneficiaries during the previous reporting period^{Footnote 4}, On average, 68.5% of the beneficiaries were receiving regular benefits, 29.3% were receiving special benefits, 1.4% were receiving fishing benefits, and 0.8% were receiving work-sharing benefits.

The average weekly benefit rate grew from $443, in the previous year, to $447 during the reporting period. Meanwhile, the proportion of claimants receiving the maximum weekly benefit^{Footnote 5} decreased to 45.6% in FY1617, down from 48.1% in FY1516. Over the same period, median weekly wages of the employed population increased from $815 to $824 (+1.1%), the smallest increase observed in the last 10 years.^{Footnote 6}

Total amount paid in Employment Insurance benefits

The increase in EI benefits (+$0.8 billion or +4.5%) during the reporting fiscal year to a total of $18.5 billion was mainly driven by higher regular benefit payments (+$547.9 million). As detailed in subsection 2.2.4, an increase of $998.4M in the reporting period is attributable to the temporary relief provided in Budget 2016 to regions impacted by the downturn in commodity prices.

The share of EI benefits paid by benefit types remained relatively unchanged compared to the previous reporting period. Regular benefits (68.5%) and special benefits (29.7%) accounted for 98.2% of total EI benefits payments as other benefit types (fishing benefits and Work-Sharing benefits) represented a little bit less than 2.0% of total EI benefits paid (see Chart 2).

Amounts paid in EI benefits increased in all jurisdictions, except for Quebec and Ontario (see Table 3). For the fourth year in a row, Alberta registered the largest year-over-year percentage increase (+33.7%) followed by Saskatchewan (+17.2%).

The amount paid in EI benefits increased similarly for both men (+4.9%) and women (+4.1%). It also increased for every age groups and claimant categories except for claimants aged 24 years old or less (-0.1%) and frequent claimants (-2.3%).

Text description of Chart 2

	$ million	% share
Regular benefits	$12,670.1	68.5%
Work-Sharing benefits	$43.4	0.2%
Fishing benefits	$282.9	1.5%
Special benefits	$5,490.4	29.7%
Parental benefits	$2,705.1	49.3%
Sickness benefits	$1,567.4	28.5%
Maternity benefits	$1,137.3	20.7%
Compassionate care benefits	$54.1	1.0%
Benefits for Parents of Critically Ill Children	$26.5	0.5%

^*The total amount paid reported in Chart 2 does not correspond to the total reported in Table 3 because data on compassionate care benefits and parents of critically ill children can only be reported on a 100% sampling basis on an aggregate level.

Source: Employment and Social Development Canada. Employment Insurance (EI) administrative data. Data are based on a sample of 10% of the EI administrative data, except for compassionate care benefits and benefits for parents of critically ill children (100% sample).

1.2 Combined Employment Insurance claims

Under certain provisions of the EI program, a claimant may receive multiple types of benefits as part of a single claim, assuming that the claimant meets each benefit type’s eligibility requirements.^{Footnote 12} A “pure” claim is one in which an EI claimant receives a single benefit type, while a “combined” or “mixed” claim is one in which the claimant receives more than one benefit type. Pure claims represented 82.0% of all completed claims in FY1617 (see Table 5).^{Footnote 13}

Women were three times more likely to claim more than one type of benefits (29.3%) than men (9.4%), mostly due to their ability to claim maternity benefits and to their high probability of claiming both maternity and parental benefits. Indeed, maternity benefits were almost always combined with other benefit types (98.4% of maternity claims), especially with parental benefits (98.3% of all combined maternity claims). However, a significant portion also claimed sickness benefits (15.1% of combined maternity claims).

The combination of maternity, parental and sickness benefits was the most common one among claims with three or more benefit types, with 24,500 claims in the reporting period. According to a 2013 study^{Footnote 14}, 98% of women living outside of Quebec^{Footnote 15} who claimed EI maternity or parental in combination with sickness benefits took sickness benefits first—this may have been due to difficulties related to the pregnancy resulting in the claimant becoming unavailable for work before becoming eligible for maternity benefits, as they were only available from eight weeks prior to the child’s expected date of birth.^{Footnote 16}

Claims for parental benefits were combined with other benefits in a lesser proportion (86.0%) as only 13.7% of men who claimed parental benefits were also paid other types of benefit (of those, 89.0% received regular benefits and 12.0% received sickness benefits). For their part, 98.5% of women that claimed parental benefits received at least another benefit type (99.5% previously received maternity benefits and 14.5% received sickness benefits).

Sickness benefits were the third most combined type of benefits (47.4% of all sickness claims), mostly with regular benefits (84.0% of all combined sickness claims). Men combined their sickness benefits predominantly with regular benefits (96.4% of all the combined sickness claims established by men). Comparatively, women combined their sickness benefits not only with regular benefits (71.5% of all combined sickness claims established by women), but also with maternity (27.5%) and parental benefits (26.1%).^{Footnote 17} Sickness benefits also represented the greatest share of combined regular claims (91.0%) with little variance when looked at by gender.

Compassionate care benefits, when combined with other benefits, were almost exclusively claimed with either sickness benefits (56.6%) or regular benefits (56.3%). Men tended to combine compassionate care benefits with regular benefits in a greater proportion (73.6%) than women (48.9%). Women were more likely to combine compassionate care benefits with sickness benefits (63.8%) versus men (39.7%). A recent study found that since introducing compassionate care benefits, the proportion of pure EI compassionate care claims have steadily increased from 41.0% in FY0304^{Footnote 18} to 58.4% during the reporting fiscal year.

Around one fifth (22.1%) of Work-Sharing claims were combined with other benefit types, predominantly with regular benefits (84.4% of all combined Work-Sharing claims). This is mostly due to the fact that both benefit types are taken due to a downturn in business activity which increases the risk of layoffs (Work-Sharing benefits) and actual layoffs (regular benefits). Regular benefits are usually claimed following Work-Sharing benefits, most likely reflecting an absence of improvement in a participating firm’s activity that eventually leads to a downsizing of the firm’s labour.

While fishers have the possibility to combine fishing benefits with other benefits type under some restrictions, only 13.3% of fishing claims were combined with other benefit types, largely with sickness benefits (84.4% of combined fishing claims). No fishing claim was recorded to have been combined either with maternity, parental, or compassionate care benefits in the last five years.

1.3 Benefits-to-Contributions ratios

EI benefits paid as a share of contributions paid, more commonly referred as the benefits-to-contributions ratio (B/C ratio), provides useful information in comparing the usage of benefits relative to EI contribution premiums paid (see Annex 2.27 for a detailed account of EI premiums collected and benefits paid). This section highlights the key findings of the adjusted total B/C ratio and the adjusted regular B/C ratio for 2015.^{Footnote 19} As EI contributions are not being assigned to a specific benefit type, the regular B/C ratio accounts for reductions in EI contributions related to special benefits.^{Footnote 20}

In Canada, total EI benefits paid as a share of total EI premiums paid increased from a ratio of 0.70 in 2014 to 0.72 in 2015 (unadjusted B/C ratio). During the same period, the unadjusted regular B/C ratio also increased from 0.41 to 0.45. As explained in the methodological note below, both of these ratios are normalized to 1.0 and serve as the base to derive the adjusted B/C ratios for every demographic groups.

Jurisdictions^{Footnote 21} with the highest proportion of seasonal claimants generally exhibit adjusted total B/C ratios above the national average. For 2015, the Atlantic provinces and Quebec received more EI benefits than their employees and employers contributed in EI premiums, when compared to the national average. Excluding the payments of special benefits results in an even higher adjusted regular B/C ratio in these jurisdictions, which highlights their greater usage of regular benefits compared to other regions (see Chart 3). On the other hand, Ontario, the western provinces, the Northwest Territories and Nunavut received less EI benefits and regular benefits per dollar contributed in premiums than Canada as a whole.

Text description of Chart 3

Region	Adjusted total Benefits-to-Contributions ratio (left scale)	Adjusted Regular Benefits-to-Contributios ratio (left scale)	Adjusted total Benefits-to-Contributions ratio for Canada (1.0) (left scale)	Unemployment rate (right scale)
British Columbia	0.89	0.78	1.0	6.2%
Alberta	0.84	0.70	1.0	6.0%
Saskatchewan	0.87	0.74	1.0	5.0%
Manitoba	0.87	0.71	1.0	5.6%
Ontario	0.80	0.69	1.0	6.8%
Quebec	1.14	1.51	1.0	7.6%
New Brunswick	2.48	2.90	1.0	9.8%
Nova Scotia	1.86	2.02	1.0	8.6%
Prince Edward Island	3.31	3.48	1.0	10.5%
Newfoundland and Labrador	3.49	4.07	1.0	12.8%
Yukon	0.99	1.10	1.0	6.4%
Northwest Territories	0.75	0.60	1.0	8.5%
Nunavut	0.67	0.77	1.0	15.8%

Sources: Canada Revenue Agency (CRA), T4 slips with employment income (for data on contributions); Employment and Social Development Canada (ESDC), Employment Insurance (EI) administrative data (for data on benefits); and Statistics Canada, Labour Force Survey, CANSIM tables 282-0100 and 282-0087 (for data on unemployment rates). CRA data are based on a 10% sample of T4 slips with employment income, and ESDC data are based on a 10% sample of EI administrative data.

In 2015, women continued to receive relatively more EI benefits than they contributed in premiums when compared to men (adjusted total B/C ratio of 1.06). However, when looked at more closely, it is women aged between 25 and 44 years old (adjusted B/C ratio of 1.48) that entirely drove the ratio up for women (see Table 6). Women of this age are the socio-demographic group most likely to receive maternity and/or parental benefits. As such, they represented the only age cohort that exhibited an adjusted B/C ratio higher than their male counterparts. Excluding special benefits, their adjusted regular B/C ratio dropped to 0.68.

While men had on average an adjusted total B/C ratio below the national average, those aged less than 25 years old and those aged 55 years old and over were above it. When only considering regular benefits, the gender gap observed in the total adjusted B/C ratio reverses as men showed a ratio of 1.21 compared to 0.73 for women. In fact, men from all age groups showed an adjusted regular B/C ratio above the national average.

Employees from goods-producing industries, with an average adjusted regular B/C ratio of 1.91, were generally above the national average. Those from the service-producing industries (adjusted regular B/C ratio of 0.71) were below the national average (see Chart 4). Workers from goods-producing industries were overrepresented among EI regular claims with 21.6% of employment and 39.5% of all regular claims in 2015. The greater reliance of workers from the goods-producing sectors on EI regular benefits relative to those of the services-producing industries can be connected to the larger share of seasonal employment, which is associated with Construction (adjusted regular B/C ratios of 3.05 in 2015) and Agriculture, forestry, fishing and hunting (adjusted regular B/C ratios of 3.91) industries.

Text description of Chart 4

	Adjusted Regular Benefits-to-Contributions Ratio
Goods-producing industries	1.91
Agriculture, forestry, fishing and hunting	3.91
Mining and oil and gas extraction	1.77
Utilities	0.36
Construction	3.05
Manufacturing	1.06
Services-producing industries	0.71
Wholesale trade	0.78
Retail trade	0.70
Transportation and warehousing	0.90
Finance and insurance	0.27
Real estate and rental and leasing	0.95
Professional, scientific and technical services	0.88
Business, building and other support services	1.33
Educational services	0.77
Health care and social assistance	0.35
Information, culture and recreation	0.83
Accommodation and food services	1.10
Other services (except public administration)	0.99
Public administration	0.40

Sources: Canada Revenue Agency (CRA), T4 slips with employment income (for data on contributions); Employment and Social Development Canada (ESDC), Employment Insurance (EI) administrative data (for data on benefits). CRA data are based on a 10% sample of T4 slips with employment income, and ESDC data are based on a 10% sample of EI administrative data.