Pandemic shows EI system in need of significant retooling, committee finds

A parliamentary committee is recommending significant changes to the employment insurance (EI) system in Canada, saying the program "no longer reflects the realities of today's labour market," and suggesting the COVID-19 pandemic has highlighted the need for urgent reforms.

"When the pandemic hit, the system didn't have a chance of covering off the people that were thrown out of work through no fault of their own," said Charlottetown MP Sean Casey, chair of the standing committee on human resources. 

"It didn't have a chance because it was outdated. … It really hasn't kept up with gig workers, migrant workers, seasonal workers. And so it was ill equipped for that reality."

A report from the committee released Thursday put forward 20 recommendations. Among them:

• That Employment and Social Development Canada (ESDC) decrease the number of hours of work required to qualify for benefits "to ensure equitable access for diverse workers across Canada, including those in part-time or non-standard work."

• That ESDC explore ways to provide self-employed people, including those in the gig economy, with access to regular EI benefits.

• That the federal government become a regular contributor to help fund EI benefits along with employers and employees.

• That Service Canada improve the "quality and accessibility" of support provided for EI claimants, which the report says can otherwise become a barrier to accessing benefits, particularly for low-income individuals, seniors, those with language barriers and other vulnerable groups.

"It's a 40-year-old system that really has only ever been tweaked," Casey said, describing the committee's recommendations as "an overhaul more than a reform … making EI more accessible, more available and more reflective of the workplace today."

Incorporating gig workers

The committee's report comes in advance of the government's own review of the EI system, with Minister of Employment, Workforce Development and Disability Inclusion Carla Qualtrough tasked in her most recent mandate letter to implement a plan to modernize the system and draw in workers from the gig economy.

"As the gig economy grows, and as there are more and more people who take contracts and work as freelance workers, EI needs to evolve to accommodate this growing workforce," said Ken MacKenzie, president of the Associated Designers of Canada, a group representing theatre set and costume designers.

MacKenzie said theatres were some of the first institutions shut down when the pandemic hit, and that it will likely be years before the sector returns to pre-pandemic employment levels.

"We're looking at a long road of economic struggle for people who already struggle economically," he said.  

Questioning divisions of EI zones

The committee is also asking that government reconsider how the employment insurance system divides the country into 62 economic regions, with eligibility requirements and benefit levels tied to the unemployment rate in each.

Moreover, the committee is specifically recommending government return P.E.I. to a single EI zone within 12 months, something Casey said he pushed for as chair of the committee, and a move that would reverse a controversial change made under Stephen Harper's Conservatives.

The C.D. Howe Institute told the committee that basing benefits on the local unemployment rate puts part-time workers in regions with low unemployment at a disadvantage, as they require more hours to qualify for benefits.

In a brief from the Migrant Rights Network, the committee was told eligibility rules disadvantage part-time, seasonal and contract workers, and thus the EI program's failings "are felt most starkly by the racialized and women workers who are forced into the most insecure parts of the labour market."

Societal interest in safety net, says chair

After the recommendation to return his home province to a single EI zone, Casey said the most important recommendation in the report is to bring government back onside as a funding partner in employment insurance. Ottawa stopped funding the program in 1990, and has since taken advantage of EI surpluses to help balance the federal budget.

"It's in society's best interest that there be that safety net, which presently doesn't exist for certain classes of workers, a growing class of workers in these times," he said.

Conservative members of the committee provided their own dissenting report, urging the government not to implement "job-killing mandatory EI premiums for self-employed individuals."

The Conservatives called the introduction of the Canada emergency response benefit (CERB) in March 2020 "a direct result of the Liberal government's failure to keep their 2015 election promise to modernize the EI system."

The committee's review had been prompted by a motion from the Bloc Québécois. In their own addendum to the report, Bloc members said that when the pandemic struck, the EI system "was clearly not up to the task. … The need for a major overhaul, which the Bloc Québécois has been seeking for years, became immediately apparent to all."

Bloc members said they agreed with the recommendations in the report, but that it does not adequately convey "the sense of urgency we feel" on the need for changes.