Regional differences in EI benefits

Canadians workers who become unemployed through no fault of their own are usually eligible for Employment Insurance (EI) benefits of up to $537 per week. This is calculated based on 55% of your average insurable earnings (which are capped $50,800 per year).

In order to qualify for EI benefits, you need to have worked work a minimum number of hours in the last 52 weeks. This number of hours varies based upon the unemployment rate in your region. Your economic region (there are 62) also determines the number of weeks you can receive EI benefits.

Basically the higher the unemployment rate is, the easier it is to qualify and the longer benefits last. This results in variable access based upon place to residence. For example, when I wrote this post, the EI region chart (linked above) showed:

• unemployment in Calgary and southern Alberta was 8.6% and workers there needed 595 hours of employment to qualify and could receive up to 42 weeks of benefits.
• unemployment in Edmonton was 6.9% and workers there needed 665 hours to quality and could receive up to 38 weeks of benefits.
• unemployment in northern Alberta was 12.3% and workers there needed 455 hours to qualify and could receive up to 45 weeks of benefits.

EI is a federally operated program and, back in March, the feds announced they would extend benefit durations by 5 weeks (to a maximum of 50 weeks) in some regions along with other changes.  Workers in Edmonton were excluded from extended benefits because the rise in Edmonton’s unemployment rate was too slow.

A secondary issue is that unemployment is calculated based upon a worker’s place of residence, rather than location of work. So, a worker who loses her job in Fort McMurray but lives in Edmonton would be out of luck (versus a worker who lived in Fort McMurray). This led to some criticism of the regional system as well as a smaller number of calls for the abolishment of regional differences in EI eligibility and duration (a recurring theme in EI criticism).

The logic of regional differences is fairly compelling: in some regions of the country, it is harder to get and keep a job. Consequently, EI should be easier to qualify for and last longer in these economically depressed regions because an individual’s employment experiences reflect structural factors in the economy. The Prime Minister defended different regional access to enhanced benefits:

“I think that both people in Edmonton and Saskatchewan should be pleased that they are not hit as hard as other parts of the country and indeed the province have been,” Trudeau said in the Global Calgary interview… .

While this quote has been spun as a heartless dismissal in some media reports, the principles (i.e., data-driven decisions; regional equity) seem like good principles upon which to base this system of income support. An alternate approach might be a national guaranteed income for everyone.

-- Bob Barnetson