Employment Insurance Monitoring and Assessment Report for the fiscal year beginning April 1, 2017 and ending March 31, 2018

From: Employment and Social Development Canada

In line with its legally mandated responsibilities under Section 3 of the Employment Insurance Act, the Employment Insurance Commission is pleased to present this report to Parliament with the objective of monitoring and assessing the impact and effectiveness of benefits and other assistance offered under the Employment Insurance (EI) program. This analysis is intended to provide a clear understanding of the impact of EI on the Canadian economy and the way it works to address the needs of Canadian workers, their families and employers.

The Employment Insurance program

The Employment Insurance (EI) program provides financial support to partially replace lost employment income for eligible unemployed contributors to the program while they look for new employment or upgrade their skills, or who are absent from work due to specific life circumstances (such as sickness, maternity, childbirth, adoption or providing care to family members). The EI program also helps unemployed individuals find suitable employment.

Canada's employment insurance system dates back to the 1940 creation of the Unemployment Insurance Commission, the precursor to the current Canada EI Commission. Collection of premiums to fund the program began in 1941 and the first benefit payments were issued in 1942. Major reforms to the program were introduced in 1971, which saw the creation of benefits for sickness and maternity, the expansion of coverage to all employees and benefits geared to reflect a claimant's income. Another series of significant changes were introduced in 1996 when a cap on premium payments based on insured earnings was introduced, as well as an hours-based eligibility system. These two elements represent the foundation for the current EI program.

EI Part I provides direct income support through EI Regular Benefits, Fishing Benefits, Work-Sharing Benefits and Special BenefitsFootnote 1. EI Part II provides Employment Benefits and Support Measures, including Labour Market Development Agreements (LMDAs) and Aboriginal Skills and Employment Training Strategy (ASETS).

Through the income benefits funded through Part I and the employment benefits and support measures funded through Part II, workers across Canada are provided support for their transition back into the labour market and to maintain attachment to the labour force.

EI regular benefits are available to individuals who lose their job through no fault of their own—for instance, due to work shortages, seasonal or mass layoffs—while individuals are available and able to work, but cannot find a job. To qualify, individuals must, among other things, have accumulated a minimum number of hours of insurable employment depending on where they live. Individuals must be available for and actively seeking employment during their claim period.

EI fishing benefits are paid to qualifying self-employed fishers who are actively seeking work. Unlike EI regular benefits, eligibility is based on insurable earnings during the claimant's qualification period rather than insurable hours worked.

Work-Sharing is an adjustment program designed to help employers and employees avoid layoffs due to temporary slowdowns in business activity that are beyond the control of the employer. Once a Work-Sharing agreement with an employer has been established, eligible workers who opt to work a temporarily reduced week receive income support in the form of EI benefits, while the employer or market recovers.

EI special benefits provide support to employees or self-employed persons who are sick, pregnant, recently gave birth, caring for a newborn or a newly adopted child, or caring for a family member who is critically ill, injured or requires end-of-life care.

Under the umbrella of Employment Benefits and Support Measures, programs delivered under Part II of the Employment Insurance Act help individuals in Canada prepare for, find and maintain employment. The purpose of these programs is to "help maintain a sustainable Employment Insurance system through the establishment of employment benefits for insured participants and the maintenance of a national employment service".Footnote 2 These programs are delivered by provinces and territories through the Labour Market Development Agreements (LMDAs), as well as by the Government of Canada in the case of pan-Canadian programming.

Recent changes to the Employment Insurance program

Budget 2018 introduced a number of reforms to the EI program, including:

  • A new EI parental sharing benefit, which adds an additional five weeks to existing standard parental benefits and an additional eight weeks to the extended parental benefit when parents share parental benefits;
  • Making the Working While on Claim provisions permanent and extending them to maternity and sickness benefits;
  • Increasing the maximum payment under the Wage Earner Protection Program from four weeks to seven;
  • Building on investments of $12.1 million announced in Budget 2017 to develop modern approaches to EI service delivery;
  • Increasing funding for EI claims processing and service delivery;
  • Improving EI call centre accessibility.

Other changes to the EI program in 2018 include:

  • Providing an additional five weeks to eligible seasonal claimants who start a benefit period between August 5, 2018 and May 30, 2020;
  • Providing new flexibility to EI claimants who are long-tenured workers to pursue full-time training at approved institutions while continuing to receive EI benefits (Skills Boost);
  • Under EI Part II, eligibility for Employment Benefits (e.g.: skills development, wage subsidies) was further expanded to include unemployed individuals who have made minimum Employment Insurance premium contributions in at least five of the last ten years (EI Premiums Paid Eligibility). Eligibility for Employment Assistance Services (e.g.: employment counselling, job search assistance) was expanded from the unemployed to include the employed. Employer-Sponsored Training eligibility was also broadened to increase flexibility for provinces and territories to support employers. These changes will give access to LMDA programs and services to a broader clientele.

These changes, however, will not be reflected in this report since they were not implemented during FY1718 and thus the impact cannot be assessed.

Future Monitoring and Assessment reports will cover the impacts of recently announced changes, beginning in the report for FY1819.

The Canada Employment Insurance Commission

The Canada Employment Insurance Commission (CEIC) has the legislated mandate to monitor and assess the EI program. CEIC also oversees a research agenda that supports the preparation of its annual EI Monitoring and Assessment Report. At the end of each fiscal year, the CEIC presents the report to the Minister of Families, Children and Social Development (the Minister), who tables it in Parliament.

The CEIC makes regulations under the authority of the Employment Insurance Act, with the approval of the Governor in Council. In addition, the CEIC plays a key role in overseeing the EI program, reviewing and approving policies related to program administration and delivery. EI program operations are carried out, on behalf of the CEIC, by Employment and Social Development Canada (ESDC) and Service Canada.

In another key role, the CEIC contributes to the financial transparency of the EI program. Annually, it commissions an EI premium report from the Chief Actuary, prepares a summary report and conveys both reports to the Minister as well as the Minister of Finance for tabling in Parliament. The CEIC also sets the maximum insurable earnings, according to legislative requirements, and as of 2017 is responsible for rate-setting based on a seven-year-break-even principle for the EI Operating Account.

The CEIC advises on which EI appeal decisions will be submitted for review by the Federal Court of Appeal. Two of the Commissioners, the Commissioner for Employers and the Commissioner for Workers, serve in a tri-partite committee with the chair of the Social Security Tribunal. The Minister consults this committee regarding Governor-in-Council appointments of members for the EI section of that Tribunal.

The CEIC consists of four members, three of whom are voting members, representing the interests of workers, employers and government. The Commissioners for Employers and Workers are appointed for renewable terms of up to five years and are mandated to represent the concerns and positions of workers and employers on policy development and program delivery related to EI and the labour market. The Deputy Minister of ESDC represents the federal government and acts as the Chairperson of the CEIC. The Senior Associate Deputy Minister of ESDC acts as the Vice-Chairperson, with voting privileges only when acting on behalf of the Chairperson.

The report

The Employment Insurance Monitoring and Assessment Report is produced under the direction and guidance of the CEIC. ESDC and Service Canada officials support the CEIC in preparing the report. The report relies on multiple sources of information to provide a comprehensive analysis of the impact and effectiveness of the EI program, including EI administrative data, Statistics Canada survey data, internal and external analytical reports and peer-reviewed evaluation studies.

The first chapter discusses the state of the Canadian labour market over FY1718. The second chapter analyzes the usage, impact and effectiveness of EI benefits provided chiefly under EI Part I during the same period. The third chapter assesses the support provided under EI Part II to unemployed Canadians through active employment and re-employment programs and services through Employment Benefits and Support Measures. The fourth and final chapter presents information on EI program administration and service delivery.

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