Employment Insurance

Canada needs to make the best use of its formidable pool of human talent. This means a renewed commitment to effective reform of the Employment Insurance system at the federal level.

• The EI system should return to its core purpose of providing insurance against short-term and unexpected job loss. This will require the establishment of a segregated EI account, with premiums that would be based only on the insurance portion of the EI system's current mandate. The fund should include a reserve provision or other mechanism to set premiums based on expected benefit requirements over the course of a business cycle.
• To ensure that the EI system does not reinforce long-term or regionally skewed dependency on low-skill, low-wage or seasonal employment, the government should review its terms and conditions and consider some form of experience rating in determining the premium rates to be paid by individuals or employers.
• Programs other than core insurance now delivered through the EI system, including maternity, parental, sickness and fishing benefits, should be funded out of general revenue. This may require a new payroll tax or other levy that would take up some of the tax room created by the decline in EI premiums flowing from a segregated fund with a narrower mandate.