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Jobless benefits in Canada are well below the average for OECD countries and, despite recent federal government enhancements to the system, remain more meagre than in previous recessions, a study said Tuesday.

The report, by Dalhousie University's chair of economics Lars Osberg, found Canada's current system “offers relatively little income protection” in terms of access, benefit duration, and income replacement levels compared with other industrialized countries, and compared to Canada's unemployment insurance systems of previous years.

The study comes as a national panel was created this month to study potential changes to the employment insurance system. Pressure is growing on the system; about 700,000 Canadians are now on EI, and the jobless rate is expected to hit 10 per cent within the next year.

“In this global recession, the weakness of Canada's EI system has become a glaring federal policy omission,” said Mr. Osberg, who wrote the report for the Canadian Centre for Policy Alternatives. “Now that they need a social safety net, many Canadians are discovering they do not have much of one.”

He recommended eligibility requirements be eased so more people can receive payments, and that a “second tier” of benefits be introduced to address long-term unemployment problems that would also cover the cost of counselling and retraining.

Currently, EI is a patchwork system with various eligibility requirements and durations across 58 regions. Tuesday's study warned that benefits for current EI recipients will run out before February, 2010, when the OECD estimates that employment will be 10.5 per cent – substantially higher than it is now, at 8.4 per cent.

The federal government's current strategy around EI only makes sense “if the current recession is just a short, sharp blip in trends,” said Mr. Osberg. However, “a quick rebound in labour demand seems most unlikely.”

Timothy Smith, professor of history at Queen's University, said the report “is useful in bursting Canadians' bubble of self-satisfaction regarding our vaunted ‘welfare state.'”

He cautioned, however, of “the fine line to walk between having virtually no system (Canada) and having an overly generous system which encourages the long-term receipt of benefits and discourages work-seeking (France).”

Earlier this year, the federal government enhanced the EI system by adding an additional five weeks of benefits – a measure that equates to the cost of 0.037 per cent of Canada's gross domestic product, the report said.