What is Employment Insurance in Canada?

Employment Insurance (EI) is the federal income-replacement programme that supports Canadians during periods without work. It traces its origins to the Unemployment Insurance Act of 1940 (the 'Bracken Plan' developed in response to Depression-era unemployment) and was renamed Employment Insurance under the Employment Insurance Act of 1996. The programme is administered by Service Canada and Employment and Social Development Canada, with the Canada Employment Insurance Commission overseeing the EI Operating Account.

EI is funded by mandatory premiums paid by both employees and employers on insurable earnings up to a maximum (in 2024, $63,200 of annual insurable earnings). Employees pay 1.66 per cent of insurable earnings ($3.04 per $100 in Quebec, which runs its own Quebec Parental Insurance Plan), and employers pay 1.4 times the employee rate. Self-employed Canadians can opt into special benefits voluntarily.

Regular EI benefits replace 55 per cent of average insurable weekly earnings to a maximum benefit (in 2024, $668 per week before tax) for 14 to 45 weeks depending on the regional unemployment rate and the claimant's hours worked. Special benefits include maternity benefits (15 weeks for biological mothers), parental benefits (40 weeks shared standard or 69 weeks shared extended), sickness benefits (26 weeks since 2022), compassionate-care benefits (26 weeks for caring for a gravely ill family member), and family caregiver benefits (15 to 35 weeks).

EI also funds Part II Labour Market Development Agreements with provinces and territories, financing skills training, job placement, and workforce programmes. The Canada Recovery Benefit (2020-2021), the Canada Worker Lockdown Benefit (2021-2022), and the EI Emergency Response Benefit (2020) provided pandemic-era support before EI rules returned to normal in 2022. Federal modernisation discussions through the EI Modernisation review have considered changes to entrance requirements, gig-worker coverage, and self-employment rules. Federal jurisdiction over employment insurance was recognised by the Privy Council Judicial Committee in the 1937 reference case after a constitutional dispute, leading to the 1940 Constitution Act amendment that gave Parliament unambiguous authority.