Posted Tuesday June 23, 2020


Automatic increases in generosity of Canada’s Employment Insurance program will add to Ottawa’s deficit and risks discouraging work long-term

As unemployment rates soar, Canada’s Employment Insurance (EI) program automatically becomes much more generous and accessible, which will add to Ottawa’s financial pressures and risks increasing long-term unemployment, finds a new study by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“Already, vastly more people qualify for EI and are eligible to receive many more weeks of benefits with fewer hours of work than just a few weeks ago, and we know this increasingly generous coverage can lead to harmful long-term effects in the labour force,” said Fred McMahon, resident fellow at the Fraser Institute and author of Extended Employment Insurance Now Open to All: Atlantic Canada’s Warning for Other Provinces.

The study finds that in April and May of this year, workers across Canada (on average) had to work a minimum 627.5 hours to qualify for EI benefits. That minimum amount of hours translated into 17.3 weeks of benefits.

But by June, workers on average need only 491.3 hours of work to qualify for 23.5 weeks of benefits.

If current levels of unemployment hold, that trend will continue with the minimum number of qualifying hours by August/September dropping further to 453.1, which will qualify an unemployed worker for 25.6 weeks of benefits.

(The study provides comprehensive data on the changing EI qualifications and coverage for the country’s 56 provincial Employment Insurance regions.)

Crucially, previous research has found that overly generous employment insurance can discourage workers from rejoining the workforce, even creating worker shortages when unemployment is high, since the work they may find might provide less income than EI payments.

“Employment insurance should be there to help workers affected by the recession—it shouldn’t deter people from going back to work,” McMahon said.

“Given the potential damage our EI program could cause to the labour market and deficit, and the system’s inherent regional inequities, policymakers should review the program with an eye on reform.”

Source Fraser Institute
 is distributed twice weekly; Tuesday and Thursday

Not a Subscriber? Receive more articles on business issues
Sent directly to your email in-box.

contact us

Publisher is Exchange Business Communication Inc.
Email Publisher

ISSN 0824-45
Copyright, 2020

Share Your Story: pressrelease @
Expand Your Reach:
advertise @
Publisher: Exchange Business Communication Inc., PO Box 248, Waterloo, Ontario, Canada
Email Editor

Content published on this site represents the opinion of the individual, organization and/or source provider. is a online daily journal of Exchange Business Communication Inc. (1997) Publishers of Exchange Magazine est. 1983. Privacy Policy. Copyright of Exchange produced editorial is the copyright of Exchange Business Communications Inc. 2020. Submitted editorials, comments and releases are copyright of respective source(s).