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

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.” Media Contact: Fred McMahon, Fraser Institute To arrange media interviews or for more information, please contact: Bryn Weese, Fraser Institute bryn.weese@fraserinstitute.org