September 8, 2010
Research reveals that regional differences in coverage were significant.
Toronto – A new study from the Mowat Centre at the University of Toronto finds that during the recent recession the Employment Insurance system let down many Canadians, disproportionately concentrated in Ontario and the West.
Although the EI program does become more generous as unemployment goes up, the new study suggests that the system’s automatic adjustments are insufficient to overcome the regional inequities in benefits that are permanent features of the EI system. The research finds that the system is poorly placed to respond if the current economic recovery stalls.
The new Mowat Note Help Wanted: How Well Did the EI Program Respond During Recent Recessions? assesses how well Canada’s Employment Insurance system performed during the most recent recession compared to previous recessions, with a focus on regional inequities.
The research finds that regional differences in coverage between provinces are extraordinary. In Ontario and British Columbia in 2009, only 38% and 39% (respectively) of the unemployed were receiving benefits, while in some other provinces over 90% of the unemployed were receiving benefits.
Despite rising unemployment rates in Ontario and Western Canada during the past recession, Canadians in Ontario and in Western Canada were far less able to access EI benefits than Canadians in the five easternmost provinces. In 2009, Ontario’s unemployment rate was above the national average (it was the fourth highest in the country), but a lower percentage of Ontario’s unemployed received EI benefits than in any other province.
Matthew Mendelsohn, director of the Mowat Centre, says that something has clearly broken down in the way the EI program works in the context of Canada’s current labour market.
“Solutions do not lie in the past. Investing more money in the existing program or redistributing money from one region to another will only compound existing problems. A new model of income support for the unemployed must be developed that acknowledges changes in the labour market.”
Jon Medow, one of the authors of the study, adds that the EI program adjusts to changes in local unemployment and provides more benefits as unemployment rises, but that these adjustments are inadequate.
“The automatic adjustments are insufficient to remedy the structural inequities in the program that leave large numbers of Canadians, disproportionately concentrated in Ontario and out West, with no protection whatsoever.”
