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Introduction

From: Employment and Social Development Canada

Official title: Employment Insurance Monitoring and Assessment Report for the fiscal year beginning April 1, 2019 and ending March 31, 2020: Introduction

As per Section 3 of the Employment Insurance Act, the Employment Insurance Commission is pleased to present this report to Parliament. Its objective is to monitor and assess the impact and effectiveness of benefits and other assistance offered under the Employment Insurance (EI) program. The intention is to provide a clear understanding of the impact of EI on the Canadian economy and the way it works to address the needs of Canadians.

The Employment Insurance program

The program provides temporary income support to replace part of a person’s employment income. It is available for people who are eligible, unemployed, and contribute to the program. The support is available while they search for work, upgrade their skills or are absent from work due to specific life circumstances.Footnote 1

EI Part I provides direct income support through:

EI Part II provides Employment Benefits and Support Measures (EBSMs). This includes those offered under the Labour Market Development Agreements (LMDAs) and the Indigenous Skills and Employment Training program.

Through the income benefits funded through Part I and the EBSMs funded through Part II, workers across Canada are provided support for optimal employment transitions.

EI regular benefits provide temporary income support to partially replace lost employment income for eligible claimants while they:

To qualify, individuals must:

EI provides fishing benefits to qualifying self-employed fishers who are actively seeking work. Unlike EI regular benefits, eligibility is based on earnings, not insurable hours of employment.

Work-sharing is an adjustment program designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. The measure provides income support to employees eligible for EI benefits who work a temporarily reduced work week while their employer recovers.

EI special benefits provide support to employees or self-employed persons who are:

Employment Benefits and Support Measures include programs delivered under EI Part II to help individuals in Canada prepare for, find, and maintain employment. These help 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 3 The provinces and territories deliver these programs through LMDAs. In the case of pan-Canadian programming, the Government of Canada is responsible for program delivery.

Employment Insurance: 80 years

Canada’s unemployment insurance system dates back to the creation of the Unemployment Insurance Commission in 1940. This was the precursor to the current Canada EI Commission. Collection of premiums to fund the program began in 1941 and the program gave out its first benefit payments in 1942.

Since then, the program and its administration have undergone several reforms to ensure that they are aligned with the evolving needs of Canadians and changes in the Canadian social landscape. Some of the most notable changes over the last 80 years to the EI program include:

  • in 1971, the Unemployment Insurance Act introduced sickness and maternity benefits. Additionally, coverage expanded to all employees and benefits were geared to reflect a claimant’s income
  • in 1979, the introduction of variable entrance requirements to better adjust to divergent economic circumstances of labour markets across Canada
  • in 1984, the addition of a summer period for seasonal fishing benefits so that self-employed fishers could claim benefits for both summer and winter periods. This is the current model of EI fishing benefits
  • in 1990, the introduction of shared parental benefits for parents of newborns or adopted children
  • in 1996, the Employment Insurance Act established a cap on premium payments based on insured earnings and an hours-based eligibility system. This adapted the system to better reflect emerging work patterns related to part-time work and multiple job holders. The family supplement provision was also introduced during these reforms. These elements are the foundation of the current EI program
  • in 2004, the introduction of EI compassionate care benefits to allow workers to care for a family member with a serious medical condition who is at risk of death
  • in 2005, the creation of Service Canada within ESDC as a one-stop place to offer integrated services to EI clients
  • in 2013, the creation of the Social Security Tribunal as a single-window decision body for appeals matters
  • in 2016, the reduction of the waiting period from 2 weeks to 1 week

The design of the program has modernized over the past 80 years in order to meet new objectives reflective of the times and evolving needs of workers and employers in Canada’s labour market.

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 Employment, Workforce Development and Disability Inclusion (the Minister). The Minister then tables the report in Parliament.

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

In another key role, the CEIC contributes to the financial transparency of the EI program. Each year, it commissions an EI premium report from the Chief Actuary and prepares a summary report. It delivers 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. As of 2017, the CEIC 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 to send for review by the Federal Court of Appeal. 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 has 4 members. Three are voting members and represent the interests of workers, employers and government. The Commissioners for Employers and Workers are appointed for renewable terms of up to 5 years. Their mandates are 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

ESDC and Service Canada produce the Employment Insurance Monitoring and Assessment Report under the direction and guidance of the CEIC. The report relies on many sources of information to give a thorough analysis of the impact and effectiveness of the EI program. Sources include 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 FY1920. The second chapter studies the usage, impact and effectiveness of EI benefits provided under EI Part I during the same period. The third chapter assesses supports provided under EI Part II through Employment Benefits and Support Measures. The fourth and final chapter presents information on EI program administration and service delivery.

Recent changes to the Employment Insurance program

The analysis of the temporary changes that were made to the EI program in FY2021 in response to the COVID-19 pandemic are not included in this report. Future EI Monitoring and Assessment reports will cover the impacts of recently implemented changes, beginning with the FY2021 report. However, each chapter briefly discusses the changes that took effect in March 2020.

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