Trends and Issues in Canada’s Employment Insurance and Activation Policy

Abstract

In this article I examine recent trends and issues in Canadian Employment Insurance (EI) and the measures implemented to promote labor market participation among those receiving EI benefits. Although EI is a federal program, it is designed so that its benefit eligibility criteria and the duration of eligibility vary with the region of residence. A distinctive feature of Canada’s EI program is that its benefits are linked to the regional unemployment rate. However, a social insurance scheme of such a design is liable to render “cross-subsidization” unfair across regions and industries. In this connection, the Canadian government implemented the activation policy in 2012, with the target population classified into three categories based on patterns of benefit receipt. With maternity and childcare leave programs making up a growing part of EI in Canada as elsewhere, calls are growing for moving beyond short-term makeshift measures toward a from-the-ground-up reform of EI financing.