EI Ambiguity

Today’s Employment Insurance (EI) release indicates that 4,000 fewer Canadians received benefits in October. The key unanswered question is whether these workers found jobs or simply ran out of benefits.

To make matters more ambiguous, the two main employment measures point in opposite directions. The Survey of Employment, Payrolls and Hours for October, also released this morning, indicates that non-farm payrolls increased by 34,500. Conversely, the Labour Force Survey indicated that employment decreased by 43,000 in October.

Therefore, it is extremely difficult to infer the extent to which the decline in EI recipients reflects modest improvement in the labour market or benefit exhaustion. At a minimum, the fact that 7,000 fewer EI claims were filed in October confirms that the pace of layoffs is slowing.

Benefit Coverage

Just over half (51%) of officially unemployed Canadians received EI benefits in October. But this fraction was below half in every province west of the Ottawa Valley.

Although the number of beneficiaries in Ontario increased in October, the total proportion of unemployed Ontarians receiving EI was only 41%. Ontario continues to have the lowest benefit coverage of any province despite having one of the country’s highest unemployment rates.

Alberta also bucked the national trend, experiencing almost as large an increase as Ontario in EI beneficiaries. The number of new EI claims filed in Alberta also rose.

Employment Insurance Coverage, October 2009 (seasonally-adjusted figures)

 

 EI Recipients

 Unemployment

 Coverage

 Canada

 809.6 

1,587.4 

 51.0 % 

 Newfoundland 

 42.2 

 43.4 

 97.2 % 

 PEI 

 9.3 

 9.6 

 96.9 % 

 Nova Scotia 

 34.9 

 46.7 

 74.7 % 

 New Brunswick 

 37.0

 34.2 

108.2 % 

 Quebec 

 207.5 

 354.0 

 58.6 % 

 Ontario 

 276.9 

 669.3 

 41.4 % 

 Manitoba 

 16.8 

 37.3 

 45.0 % 

 Saskatchewan 

14.4 

 29.0 

 49.7 % 

 Alberta 

 74.6 

 160.5 

 46.5 % 

 BC 

 98.0 

 203.5 

 48.2 % 

UPDATE (December 23): Quoted in The Financial Post, other CanWest newspapers, The Hamilton Spectator and Globe and Mail Update

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