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EI benefits falling faster than unemployment

Statistics Canada reported this week that 12,290 fewer Canadians received Employment Insurance (EI) benefits in May compared to April. EI benefits are shrinking far faster than unemployment.

In percentage terms, the number of EI recipients declined as much in just the last month as unemployment declined over the past year. Between April and May, the number of unemployed Canadians decreased by only 1 per cent while the number of EI beneficiaries decreased by 2.4 per cent. Compared to May of last year, the number of unemployed workers was down by 2.4 per cent but the number of EI beneficiaries was down by 7.4 per cent.

We already know from the Labour Force Survey that unemployment rose in June. The downward trend in EI is troubling given that more workers will likely need benefits.

The federal government is cutting back EI too quickly given that unemployment is barely decreasing. As Armine Yalnizyan points out, EI coverage is now at its lowest level since World War II.

Erin Weir is an economist with the United Steelworkers union and a CCPA research associate.

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