EI Benefits by City

UPDATE (September 29): Quoted by The Globe and Mail, National Post, Toronto Star, and Canadian Press

. . .

A recent inquiry for a NOW Magazine article has inspired me to use the July Employment Insurance (EI) figures, released this morning, to examine how this program serves Canadian cities. However, I begin with a national overview of the numbers and end with my usual provincial breakdown.

National Overview: EI Recipients Exhausting Benefits

The number of Canadians receiving regular EI benefits declined in July. TD Economics apparently thinks that today’s news “is a reflection of the improving fortunes in the Canadian labour market.” This interpretation might make sense if employment had increased in July.

In fact, we already know from the Labour Force Survey that employment declined sharply in July. A more likely explanation of the simultaneous decline in EI beneficiaries is that significant numbers of unemployed workers are now running out EI benefits without finding jobs.

This development underscores the importance of enacting the proposed benefit extension for some long-tenured workers, but also the need for broader EI reform to improve benefits for all unemployed workers.

The proportion of unemployed Canadians receiving benefits, which had recently risen slightly above 50%, fell back in July. Again, fewer than half of unemployed workers are getting benefits.

(Statistics Canada’s seasonal adjustment of the data may also have played a role in the decrease. In June, this methodology increased the number of reported beneficiaries by 154,490. In July, seasonal adjustment added only 32,740. Therefore, it may be that the June figures somewhat overstated the number of EI recipients, making July’s decrease less surprising.)

The silver lining in today’s figures is that the number of new EI claims continued to decline. This recent trend seems to confirm that, while unemployed workers are not finding jobs, the pace of layoffs has slowed. In other words, the labour market is getting worse more slowly.

EI Benefits by City, July 2009:

Entrance Requirement and Share of Unemployed Receiving Benefits

City  

Hours to Qualify  

Coverage 

St. John’s, NL  

 595  

 57.8 % 

Halifax, NS 

 665   

 41.4 %  

Saint John, NB

 665  

 66.6 % 

Quebec, QC 

 700  

 57.7 %  

Montreal, QC

 560 

 37.1 % 

Ottawa, ON 

 700  

 30.5 % 

Toronto, ON 

 525 

 30.5 %  

Hamilton, ON 

 595  

 39.0 %  

Windsor, ON  

 420  

 39.2 %  

Winnipeg, MB  

 700  

 33.1 %  

Regina, SK  

 700  

 30.9 %  

Saskatoon, SK  

 700  

 37.4 %  

Calgary, AB 

 630  

 38.9 %  

Edmonton, AB  

 630  

 36.0 %  

Vancouver, BC  

 630  

 36.8 %  

Victoria, BC 

 665  

 35.9 % 

Note: Coverage is beneficiaries divided by unemployment

The accessibility and duration of EI benefits depend on the local unemployment rate. In many rural areas, job opportunities have long been scarce and seasonal layoffs are common. Traditionally higher unemployment has caused relatively greater EI use.

By comparison, benefits have been less available in cities. Thirteen of the sixteen cities shown above fall below the national average in terms of EI coverage. Fourteen fall below their own province in this regard (see provincial table below).

Windsor, an urban area with an unemployment rate around 15%, is an exception among cities for the accessibility of EI benefits. The required work period to qualify there is 420 hours, the lowest entrance requirement anywhere in Canada. However, the proportion of unemployed workers receiving benefits in Windsor still falls slightly below the Ontario-wide average.

The typical urban-rural difference explains much of the regional variance that tends to be (over)emphasized in EI debates. The Atlantic provinces have had higher EI usage largely because they are more rural, rather than because of an alleged “culture of defeat” or dependence. Atlantic Canada’s largest urban centre, Halifax, is comparable to Montreal, Hamilton, Calgary, Edmonton and Vancouver in terms of the proportion of unemployed workers receiving benefits.

Contrary to the usual stereotypes, the number of work hours needed to qualify for EI benefits is now lower in Vancouver, Edmonton or Calgary than in Halifax or Saint John. Similarly, it is easier to qualify in Toronto than in St. John’s.

EI Benefits by Province, July 2009 (in thousands, seasonally-adjusted)

 

Recipients 

Unemployment   

Coverage  

Canada   

787.7   

1,583.0   

 49.8 %  

Newfoundland   

 47.7   

 43.8   

108.9 %   

PEI   

 9.0   

 9.7   

 92.8 %   

Nova Scotia   

 34.6   

 45.5   

 76.0 %   

New Brunswick  

 36.4  

 37.8   

 96.3 % 

Quebec  

197.7   

379.2   

 52.1 % 

Ontario   

266.8   

665.1   

 40.1 %   

Manitoba   

 15.2   

 33.1   

 45.9 %   

Saskatchewan   

 14.1   

 25.9   

 54.4 %  

Alberta   

 59.5   

153.9   

 38.7 % 

BC  

 92.6   

188.9   

 49.0 %  

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