EI was supposed to be a little easier to get these days...
On March 22, then Prime Minister Justin Trudeau announced a temporary set of changes to Canada’s Employment Insurance system designed to make it a little easier for workers who are laid off to qualify for benefits.
The Government of Canada waived the waiting period (a bit like a co-pay in most insurance systems) so that benefits for qualifying claimants could get benefits sooner. And they also temporarily stopped the practice of counting some forms of separation pay (like vacation pay in lieu of leave, sick pay in lieu of leave, and severance pay) as income in the weeks since a claimant said they had stopped working. These two measures can make EI faster to get. One of the more material things the government did was to reduce the maximum number of hours to qualify for regular benefits from 700 insured hours to 630. To qualify for EI, you have to have a record of having worked in insured employment in which both you and your employer(s) were paying premiums into the EI system. The hours you need depend on where you live in Canada and the rolling monthly average unemployment rate in that region. The idea is that if the unemployment rate is higher, then it’s probably harder to move into a new job, and that fact should probably be taken into account when screening you for EI regular (ie, in cases of lay-offs) benefits, and also how many weeks of benefits you should get. The current table for regions is available here if you want to take a look: https://srv129.services.gc.ca/eiregions/eng/rates_cur.aspx
The bottom line is that a lower threshold of hours can makes it easier to get on and stay on EI if you are laid off. The hours rule, by the way, doesn’t do anything to sort out what happens when you thought you were in insured employment but your employer is a douchebag and tells you you’re an “independent contractor” (I’m looking at you, unnamed owner of a certain coffee shop with lots of plants in downtown Ottawa). And the hours rule doesn’t deal with the sometimes murky power issues that can lie between “laid off” and “fired with cause”. Note: fired with cause, or quit = not eligible for EI.
Did the change to the hours rule matter?
I’m not sure.
On paper, it should have, at least at the margin. But the government may have picked too small a slice of the margin.
Looking at the 2023 EI Coverage Survey (it’s the most recent I can get on ODESI, direct your complaints to someone with power over these things, not me), I find that an unemployed person (someone simultaneously not working, available to work, and seeking work in the survey reference week) who did not get EI* had a median count of 730 insured hours in the previous year. The mean is 961 insured hours. But the 25th percentile is just 230 insured hours. If 2025 is at all like 2023, this would mean that reducing the hours from 700 to 630 might help some laid-off workers at the margin, but it’s a pretty slim margin. In fact, when looking at the same 2023 data, among unemployed respondents (and this excludes new parents or those who are engaged in other caregiving, or who are themselves ill), the most common reason for not receiving EI benefits was that they hadn’t worked in the last 2 years (36%, so might be listed as having 0 insured hours), followed (at 11%) by those who “did not know enough about EI”. That’s right, as of 2023, the second most common reason for not getting EI if unemployed (but not because of parenting), is a gap in awareness of the program. No marginal shift in the insured hours rule is gonna’ change that.
Moreover, the change in the EI hours rule may not have worked.
The graph below plots the year-over-year ratio between the volume of new approved EI claims against the volume of new EI claims received in a month. There are always seasonal variations in employment and EI data, so this graph uses the same 3-month period for the last 3 years to rule out seasonal effects. In 2023, and 2024, the regular EI rules applied. In 2025, the temporary rules (to make the system easier to access) applied.
Comparing the year-over-year changes gives us something like a seasonally-adjusted estimate. Claims in April, May and June of 2025 would have all come under the Government’s temporary new rules. You can see the precipitous drop in June 2025. But, recognizing lags in the data, let’s average across the 3 month period. Across the same three months, the share of approved claims to new claims in 2023 and 2024 was 87%. By 2025, it had fallen to 84%. This is in a time when we’re making changes to make it easier to get EI. What happens when we stop?
What next?
On September 5, the current Prime Minister announced that two of the EI program changes would be extended. The announcement referred to the waiting period and the separation pay, not the rule on insured hours.
Maybe this won’t matter. Maybe the workers who are getting laid off now have so few insured hours, or so many insured hours, that this isn’t the main point in improving accessibility. But it seems like there are a non-trivial share (maybe about 40% as of 2023, using a back of the envelope estimate) who were just outside the tiny (10%) adjustment to the insured hours rule. They no doubt have other obstacles to getting access to this program, even if they were pay into it. On top of those things, long-term unemployment and lack of program awareness are two things that should be keeping policymakers up at night.
But if I were in a government looking to save money on operational costs, I might not be keen to make EI too easy to get. Yes, it falls under the “transfers to people” that the government has promised not to touch. But if you announce you are making EI easier to get, then more people might apply. And those applications will have to be dealt with. And you have to pay for the costs of receiving, processing, adjudicating, and implementing those claims somehow. Those costs are usually billed to the EI operating fund (funded via worker and employer premiums, not the Consolidated Revenue Fund). If you have to increase premiums on workers and employers, and in a downturn, that’s not good.
If you built it, they might come and actually use the program you’ve made…. (insert your own preferred emoticon here).
That’s one potential lesson to take away from COVID-19 benefits. It’s a useful lesson for protecting the fisc. It’s also a useful posture for discussion with private sector interests.
But if, as the leader of the government, you’re trying to shepherd a country through an economic (and social and clearly geopolitical) “rupture”, it might be important to address the sources of administrative burden citizens also face in accessing support from the programs they pay into. That means tackling a complicated web of rules, timidity in communicating to the public, and proceduralism — all things the current government has called out, but mainly in reference to projects of national importance and regulatory reform to promote economic growth.
There won’t be a national “Office for Major Social Programs”. But maybe there should be more attention to the automatic stabilizers and the social safety net that is meant to support Canadians through difficult transitions. Otherwise, what are we even doing? Performatively futzing around at the margins?