Canada’s employment insurance program has a surplus, which means employers and employees are contributing more to the fund than unemployed Canadians are drawing out.
Good news, right? Canada’s budget watchdog doesn’t seem to think so.
In a report released Thursday, the Parliamentary Budget Office said 38 per cent of unemployed workers received EI benefits in 2014, down from 46.6 per cent in 2007, the year before the global financial crisis hit, taking many Canadians' jobs with it.
While critics point to declining EI eligibility as evidence the Harper government has made Employment Insurance stingy, the PBO has a different explanation. And the two main reasons fewer workers are drawing from the program are not signs the labour market is getting better; they're signs it's getting worse.
Check out these charts from the PBO's report on EI:
The number of long-term unemployed spiked during the recession, and has stayed up
The PBO says part of the reason fewer people are receiving EI is that more of the unemployed are long-term unemployed, and have used up their benefits.
The percentage of Canadians in temp jobs rose during the recession, and is declining very slowly
Temporary employment, including contracts and short-term gigs, has risen in recent years and those type of employees don’t qualify for EI. Employers, still jittery about the economy, have increasingly found this type of work attractive as they don’t have to shell out for benefits.
The percentage of unemployed Canadians who receive EI has been falling since the recession
The Parliamentary Budget Office notes that the projected annual surplus of $3 billion in EI premiums could be used to temporarily extend EI access to 10 per cent, or 130,000 of Canada’s unemployed.
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