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Employment Insurance Coverage Survey

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The Daily

Thursday, July 24, 2008

The number of Canadians who received regular Employment Insurance (EI) benefits in 2007 hit its lowest level since 2000.

The decline in beneficiaries has been due mainly to a drop in unemployment, rather than a change in the makeup of the unemployed.

In 2007, roughly 452,000 Canadians received regular EI benefits during the reference week of the survey, down 5.0% from 2006 and the fifth year of decline in a row. The level was 16.5% below the post-millennium peak of 540,800 in 2003.

Of the 452,000 recipients, 304,000, or 67.3%, were unemployed. This was a 23.8% decline from 2003. The regular benefits program is designed primarily for the unemployed. Other recipients included those employed less than 30 hours; not in the labour force or working full time with an interruption in the three months prior to the reference period; and mothers of infants that were working.

During the reference week, about two-thirds (67.7%) of EI claimants received regular benefits, and just over one-quarter (25.7%) received maternity or parental benefits.

On average, there were just over one million unemployed people nationally in 2007, down 16.0% from 2003.

Composition of unemployed remained relatively unchanged

The decline in the number of beneficiaries between 2003 and 2007 was not due to substantial changes in the composition of the unemployed. Eligibility rates among the unemployed remained relatively stable during this five-year period.

In 2007, roughly 70% of the one million unemployed Canadians contributed to the Employment Insurance program. In all, 54.0% were potentially eligible to receive benefits, regular or other, compared with 57.1% five years earlier.

Furthermore, of the unemployed Canadians, 41.0% either received or were to have received benefits; 3.7% did not receive benefits, but were eligible based on reported hours worked; and 9.6% were not eligible based on reported hours worked.

The most common reason for not being covered by the Employment Insurance program was lack of paid employment during the 12 months prior to the survey. In 2007, an estimated 25% of unemployed individuals were not covered for this reason, a slight decrease from 2006.

Note to readers

The Employment Insurance Coverage Survey (EICS) provides information on the coverage of the Employment Insurance program. It provides a meaningful picture of who does or does not have access to Employment Insurance benefits among the jobless. The survey also covers access to maternity and parental benefits.

In 2007, the EICS interviewed 1,938 unemployed and 1,233 mothers of a child less than one year old.

The survey has been conducted for Human Resources and Social Development Canada since 1997. The survey is administered to a sub-sample of individuals in the Labour Force Survey and is conducted in April, July, November and January each year.

The Employment Insurance program is an income replacement program to help Canadians face situations such as job loss or work stoppage. Canadians receive mainly two types of benefits: regular benefits, which are for individuals who have lost their employment, or benefits for the birth or adoption of a child, which include maternity and parental benefits.

There is always a certain proportion of unemployed who do not qualify for benefits. The first are those who have not contributed to the program because they have not worked in the past 12 months or their employment is not insurable. This group includes self-employed workers. The second are those who have contributed to the program, but who have left their employment for reasons that do not meet the eligibility criteria, such as workers who left their job voluntarily.

Not everyone who left their work for a reason that meets eligibility criteria is entitled to benefits. An unemployed person is also required to have accumulated a certain number of hours of paid employment to receive benefits. In 2007, 9.6% of unemployed individuals were otherwise potentially eligible, but had not accumulated enough hours of work to receive benefits.

In 2007, four out of every five of potentially eligible people (82.3%) had accumulated enough hours to receive benefits, a proportion that has remained stable over the past five years.

Maternity and parental benefits

The EI program is also designed to assist individuals who experience a job separation due to the birth or adoption of a child. A key change occurred on January 1, 2006, with implementation of the new Quebec Parental Insurance Plan (QPIP).

It replaced the maternity benefits, parental benefits and adoption benefits previously available to Quebec parents under the Federal Employment Insurance Plan. Individuals can only be covered by one plan at a time. Moreover, the plans differ in terms of the individuals involved and eligibility conditions. The QPIP operates in a similar way to the federal EI plan in that it is an income replacement plan. This means that applicants must have received insurable income to qualify for benefits.

At the Canada level, the number of mothers with a child up to 12 months of age rose 3.3% to nearly 377,000, after declining slightly in 2006. More than three-quarters of these mothers (77.2%) had insurable income. In all, 85.9% of them had received benefits in the form of maternity or parental benefits during their pregnancy or since the birth or adoption of their child.

These benefits were from either the EI program or the QPIP. Two-thirds (66.3%) of mothers had received benefits, a proportion which remained relatively stable from 2003 to 2007.

About 23% of all mothers with a child one year old or younger did not have insurable employment. More than half of them had not worked in the previous two years.

Increase in parental leave for fathers

The introduction of the new QPIP in 2006 has had a major impact on the number of fathers who claimed or intended to claim parental benefits.

Nationally, the proportion of fathers who took or intended to take parental leave increased from 20.0% in 2006 to 26.8% in 2007. In comparison, only 15.0% claimed this type of leave in 2005. This increase mainly reflects the trend in Quebec as 73.6% of fathers took advantage of the plan in 2007, compared with 48.4% in 2006 and 27.8% in 2005. This change was likely due to one of the provisions in the QPIP plan, which includes leave that applies exclusively to fathers.

Between 2005 and 2007, the number of fathers either taking this leave, or planning to take it, increased by about 46%.

Definitions, data sources and methods: survey number 4428.

To order custom tabulations, for more information or to enquire about the concepts, methods or data quality of this release, contact Client Services (toll-free 1-800-461-9050; 613-951-3321; fax: 613-951-4527;, Special Surveys Division.

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