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(Kevin Van Paassen/The Globe and Mail)
(Kevin Van Paassen/The Globe and Mail)

Number of EI recipients rises in June Add to ...

A large majority of the newly jobless are receiving some relief from the much-criticized Canadian employment insurance system, new figures released Tuesday suggest.

Statistics Canada reported 316,300 more Canadians were receiving employment insurance benefits in June than in October, a nine-month period that saw net employment decrease by 370,000.

While the figures are not a straight correlation, a Statistics Canada official said it was clear a large percentage of workers who lost their jobs during the recession are able to collect EI benefits, giving a boost to the Conservative government's contention that the system is working as designed and doesn't need wholesale changes.

TD Bank chief economist Don Drummond said the government could take credit for another reason - the decision to tackle duration of benefits rather than eligibility requirements. In the January budget, Ottawa extended benefits to laid off workers by up to five weeks to about a year in some cases.

"I think time is going to prove that the debate we're having on the employment insurance system is focusing on the wrong thing. I think this recession will prove it has been less about an access problem than a duration problem," he said.

Mr. Drummond said if economists are correct in forecasting continuing job losses until next year, the next flare-up in the EI debate will be that workers are running out of benefits.

But Liberal human resources critic Michael Savage said the figures still show the system is failing Canadians.

"We still have 1.6 million unemployed and half are not getting EI, that's nobody's definition of success," he said. He also noted the net employment number - which includes employment gains - obscures the fact that nearly 500,000 Canadians have lost their jobs since October.

"At a time of stimulus spending, we should be taking care of the people who need it the most," he said.

In June, after targeting its key criticism of the January budget on strict EI eligibility requirements, the Liberal opposition demanded the government strike up a panel to review the system as a condition for not forcing an election.

The figures since January suggest, however, that as job losses have deepened, more and more Canadians have been successful in tapping the system for income support. That's partly because the newly laid off include many experienced, full-time workers, and because eligibility requirements ease as the jobless rate rises.

In June, 816,600 Canadians, or 51.3 per cent of the 1.6 million officially unemployed, were collecting benefits, a significant improvement from January's ratio of 42.7 per cent.

The agency said the number of beneficiaries increased 18.8 per cent in the second quarter, down from the 25.2 per cent growth rate of the first quarter.

The increased coverage is a good thing, even if it does point to the heavy toll the slump is exacting on working Canadians, said labour economist Erin Weir of the United Steelworkers.

"It's better than 43 per cent, but I would say too little, too late," he said.

"We've been in a pretty bad labour market for a number of months now and we've only just gotten to the point where a little more than half of unemployed workers are receiving benefits."

He also noted that in Ontario, Canada's most populous province and manufacturing heartland, only 41 per cent of the unemployed currently qualify. Mr. Weir agreed with Mr. Drummond that many workers currently collecting may run out of benefits before they are able to find new jobs.

Another promising note in the June data was that initial and renewal claims fell by 7.9 per cent, suggesting the labour market deterioration is slowing.

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