The Employment Insurance (EI) program plays a key role in Canada’s economic and social union by providing temporary income support to replace lost employment income to individuals who:
• Become unemployed involuntarily; or,
• Are unable to work because of sickness, or pregnancy, or taking leave from work to provide care for a newborn or newly adopted child, or a critically ill or gravely ill family member.
The EI system is divided into several sub-programs:
• EI regular benefits provide support to employees who involuntarily lose their jobs and are looking for work. The program is designed to respond automatically to changes in regional labour markets. Through the Variable Entrance Requirement, the number of insurable hours required (420-700 hours) to access EI benefits and the duration of benefits provided are based on the monthly unemployment rate in each of Canada’s 62 EI economic regions.
• EI fishing benefits provide support to self-employed fishers who are actively seeking work. Insurable weekly earnings for fishers are calculated by dividing the insured fishing earnings obtained during the qualifying period by the divisor associated with the claimant’s regional unemployment rate.
• EI special benefits provide support to employees or participating self-employed persons who are absent from work due to specific life circumstances. Special benefits encompasses: maternity, parental, sickness, compassionate care, and parents of critically ill children benefits. To be eligible for special benefits employees require 600 hours of insurable employment in their qualifying period.
• Part II of the Employment Insurance Act supports skills training, on-the-job work experience, employment assistance services, and employment counseling to assist eligible unemployed Canadians to prepare for, obtain, and maintain employment. The program administrative efforts include the collection of premiums and employer payroll information and the delivery of benefits, supported by a network that manages quality, integrity and appeals, overpayments, and the collection of penalties.
The EI benefit rate is 55% of average weekly insurable earnings up to the Maximum Insurable Earnings (MIE) of $51,700 in 2018, for a maximum weekly taxable benefit of $547. Financing for the EI program comes entirely through premium contributions made by workers and employers. Premiums are paid on insurable earnings in a given tax (calendar) year up to the annual Maximum Insurable Earnings, and employers pay 1.4 times the employee rate. The Canada Employment Insurance Commission is responsible for setting the annual EI premium rate according to a seven-year break-even mechanism, based on the forecasts and estimates of the EI Chief Actuary.