A record number of Canadians are receiving Employment Insurance benefits this fall, months after the program had been largely sidelined because of the pandemic.
About 1.4 million people received EI benefits for job loss in October, adjusted for seasonality, Statistics Canada said Thursday. That was more than triple the number of recipients in February and the highest on record. (Unadjusted for seasonality, there were about 1.2 million beneficiaries.) After the 2008-09 recession, the number of recipients peaked at 822,000.
Thursday’s report fills out the picture of continuing labour stress. Combined with data from other support programs, it appears that more than two million Canadians were still relying on jobless benefits this fall – a troubling sign as the job market enters a winter chill.
“January and February are times where there is generally not much seasonal employment,” said David Macdonald, senior economist at the Canadian Centre for Policy Alternatives. “It’ll certainly be a challenging time for people who are unemployed and looking for work.”
For months, the EI program was effectively on pause. Policy makers said the system was unable to handle a crushing volume of claims, while millions of others whose employment was affected by COVID-19 did not have EI coverage. (Those who were already on EI when the pandemic hit continued to receive those payments.)
Instead, the federal government brought in the Canada Emergency Response Benefit (CERB). That program paid about $82-billion to nearly nine million people and ended in late September.
After that point, the underemployed were funnelled into various support programs. That included EI – albeit with temporary changes to qualifying criteria. That meant only 120 hours of insurable work were needed to qualify for regular benefits, which are tapped after job loss. The minimum weekly payment was also raised to $500 before taxes.
By changing the criteria, a substantial number of people were brought into the fold. In October, 11.2 per cent of regular EI recipients would not have qualified under previous rules. Nearly one-fifth of youth aged 15 to 24 were able to receive EI because of the changes.
There was also a marked increase in the number of women on EI. In February, women accounted for just more than one-third of regular EI recipients. In October, they accounted for half of beneficiaries – the first time that’s happened in data going back to 1997. The adjusted criteria allowed slightly more women (11.8 per cent) than men (10.6 per cent) to qualify.
Statscan noted that nearly seven in 10 recipients of regular EI benefits had not made a claim in the previous five years. “A lot of these folks have not experienced unemployment before,” Mr. Macdonald said. “The long-term employed have become the long-term unemployed as part of the pandemic.”
Beyond temporary changes, the federal government has signalled that it wants to shake up EI. “This pandemic has shown that Canada needs an EI system for the 21st century, including for the self-employed and those in the gig economy,” read September’s Speech from the Throne.
For now, those workers – who typically don’t pay EI premiums – are covered by the Canada Recovery Benefit, a CERB-like program that pays $500 weekly before tax. Thus far, about $5-billion has been paid to roughly 1.3 million people. The CRB has two-week eligibility periods, and each applicant can apply for up to 13, giving a half-year of coverage.
For the Oct. 11 to 24 period, there were slightly more than one million people who received the CRB. That suggests more than two million people were receiving EI or CRB in October. Ottawa has also brought in jobless benefits due to sickness and caregiving. To date, each program has sent payments to roughly 250,000 people.
The coming months will be rough for the labour market. Job creation is slowing, and with tighter COVID-19 restrictions in place, many hard-hit industries are laying off workers again. Furthermore, there are 1.2 million people who have been jobless for longer than six months and want to work.
“The longer they’re unemployed, the harder it will be for them to get back into the work force,” Mr. Macdonald said. “You’ve lost skills. You’ve lost connections with employers.”
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Matt Lundy