Portico Press

Employment insurance in Canada has long been a contentious program in the welfare regime.  While periods of economic stagnation and change occur, reliance on this program has gradually increased in the past two decades.  EI’s roles and influences on the Canadian labor market has often connoted it with major economic recessions and Canadians are now facing down the barrel of a potential economic recession that coincides with a federal election. The debate on how, and where, to appoint tightening federal tax dollars has once again become a mainstage discussion.  These recessions have provided politicians the opportunity to act on the collective focus directed towards the economy to enact sweeping changes to the program.  The most recent economic downturn, caused by the pandemic, provided the Liberal government an unique possibility of EI reform in regard to the employment regions of Canada, an opportunity that many feel was squandered.  As Canada’s GDP stagnates and Canadians face the polls in 2025, a renewed focus on how to update EI and its regions must occur.

Current economic regions cover large areas of Canadian provinces, at times encompassing areas that may have different opportunities for jobs or entirely different industries.  The areas that harbor the highest unemployment rates are those in the northern parts of Alberta, Saskatchewan and Newfoundland and the territory of Nunavut.  These areas suffer from economic challenges that are related to their seasonal labor and ailing infrastructure to support economic growth.  An opportunity to refocus EI to become a program that emphasizes employment, rather than reliance, begins with a restructuring of EI requirements, one which would restrict the cleavages between rural and urban employment opportunities. 

To begin the massive challenge that is reframing unemployment insurance in Canada we must start with where EI emerged from.  Economic regions were introduced by Pierre Trudeau in 1971 to split jurisdictions of unemployment into sixteen distinct regions.  The Unemployment Insurance Act used these regions in conjunction with Statistics Canada to determine the necessary benefits for each region as it pertained to their unemployment rates.  The act was associated with the early model of unemployment insurance as it looked to clarify the “disjointed mixture of social insurance, income maintenance, and social adjustment programs” (Hale, 1998, 429).  This act was restricted in its ability to resolve unemployment issues because of political pressure from provinces that had relied upon large transfers from the federal government, mainly Quebec and the Atlantic provinces.  

By the mid 1970’s the unemployment insurance act had been amended to increase benefits for families with the Family Benefits Amendment Act of 1974.  This act included special benefits for children of families utilizing unemployment insurance.  The discrepancies between economic regions arise from this example as the family benefits were Federally mandated, “while both Quebec and Prince Edward Island ha[d] their own child allowances, which supplement[ed] the federal payments” (Robinson, 1997).  Within the differences of benefits and requirements political cleavages formed from the ‘have’ and ‘have-not’ provinces and regions.  Political influences challenged the Trudeau Sr. administration and now similar forces are creating pressures on Trudeau Jr.’s cabinet.  

Current perspectives on EI have placed the federal Liberal party on a path of left leaning centrism, a platform that allows for effective use of the program while not necessarily encouraging the economic independence that the Conservative party harangues on.  In opposition the Conservative party, under the campaign leadership of Pollieve has argued for austerity measures in government that could see a decline in funding for the EI program across the board.  The mission of unemployment insurance has not changed in Canada, its principles of alleviating economic hardships for those in regions suffering from structural unemployment has mearley drifted as Canada’s labor market grew and changed.  The markers of EI’s effectiveness should always be its ability to reduce unemployment rather than maintain it, in this aim redistricting rural and urban regions would allow for a clearer perspective on the status of the program going forward.  

Sources:

Thomas J. Courchene, John R. Allan. Originally published on Policy Options September 1. “A Short History of EI, and a Look at the Road Ahead.” Policy Options, 3 Apr. 2021, policyoptions.irpp.org/magazines/employment-insurance/a-short-history-of-ei-and-a-look-at-the-road-ahead/.

Hale, Geoffrey E. “Reforming Employment Insurance: Transcending the Politics of the Status Quo.” Canadian Public Policy / Analyse De Politiques, vol. 24, no. 4, 1998, pp. 429–451. JSTOR, http://www.jstor.org/stable/3552018.