EI: The Decline Resumes

Statistics Canada reports that, after February’s pause, Employment Insurance (EI) resumed its contraction in March. Specifically, 24,200 fewer Canadians received regular EI benefits. The key question is whether these unemployed workers found jobs or simply ran out of benefits.

The Labour Force Survey indicated that employment rose by 17,900 in March. Therefore, it seems unlikely that everyone leaving EI found a job.

Meanwhile, unemployment declined by only 4,300 in March. EI is contracting much faster than unemployment. In March, just 44% of officially unemployed Canadians received EI benefits (668,100 out of 1,515,100).

Canada’s labour market has recovered somewhat over the past year. However, both total unemployment and the unemployment rate are much closer to the peaks reached during the economic crisis than to pre-recession levels. Yet the EI program has already fallen back to its pre-recession level of coverage, in terms of the proportion of unemployed workers receiving benefits.

The federal government should improve EI to help a larger proportion of the Canadians who remain unemployed.