Question Period Note: EI Modernization

Why have you not announced a plan for modernizing the Employment Insurance (EI) program?

• Millions of Canadians rely on Employment Insurance every year when they find themselves out of work, start a family, take time to care for a loved one, or need to get better themselves.

• The Government is committed to ensuring EI offers reliable and flexible support to respond to modern workforce realities.

• Most recently, we took action to ensure EI supports workers and employers impacted by tariffs by introducing a suite of temporary EI measures and Work-Sharing flexibilities.

• In these times of major labour market transformations, EI is critical for supporting workers and help stabilize their income during job transitions and economic disruptions.

• Also critically important is access to retraining and upskilling opportunities for workers to stay in the workforce and get the skills they need to grow their careers and prepare for the jobs of the future.

Previous Government Commitments to Modernize the EI Program

· The former Minister of Employment, Workforce Development and Disability Inclusion’s 2021 mandate letter committed to “modernize the EI system for the 21st century, building a stronger and more inclusive system that covers all workers, including workers in seasonal employment and persons employed by digital platforms, ensuring the system is simpler and more responsive for workers and employers. […] In addition to moving forward with extending EI sickness benefits from 15 to 26 weeks, the plan will include a new EI benefit for self-employed Canadians and a 15-week benefit for adoptive parents.”

· As per Budget 2021 commitment, comprehensive consultations on the EI program were completed in 2022 and What We Heard reports were published online (Phase 1 report – April 2022; Phase II report - September 2022).

· A number of key EI changes were implemented since 2022:

o Budget 2022 announced the extension to the duration of EI sickness benefits from 15 to 26 weeks. This change came into effect on December 18, 2022, for all new sickness benefit claims established on or after that date.

o The 2023 Fall Economic Statement announced a new shareable 15-week EI benefit for parents through adoption or surrogacy, along with corresponding changes to the Canada Labour Code. This legislation received royal assent in June 2024, and implementation is ongoing.

o In addition, FES 2023 announced a new EI temporary measure providing up to four additional weeks of regular benefits for seasonal workers, on top of the up to five additional weeks available under the existing temporary legislated measure, to eligible seasonal claimants in the 13 targeted EI regions who establish an EI claim between September 10, 2023, and September 7, 2024.

o Introduction of EI temporary supports in 2024 for workers affected by lengthy evacuations caused by the major wildfires in Jasper, Alberta and Bunibonibee Manitoba (ends in summer 2025).

o A two-year extension through to October 2026 of a temporary measure that provides up to five extra weeks of regular benefits for eligible seasonal workers.

Current Unemployment Trends and Role of EI in Economic Downturns

· The EI program effectively functions as an economic stabilizer, including during economic downturns. In previous economic shock situations, temporary EI measures have been implemented to help improve access and adequacy of benefits, responding to the economic and labour market impacts of these events.

· Unemployment has been on the rise in the first quarter of 2025.

o The national unemployment rate increased by 0.1 percentage point in May 2025, reaching 7.0%, the highest unemployment rate since September 2016 (excluding COVID-19 years of 2020 and 2021).

o The share of the unemployed population that has been out of work for at least a year is 12.6% in May 2025. This is a significant increase from 8.3% in May 2024 and represents the highest levels of long-term unemployment since the 2000s, excluding the COVID-19 period.

o The number of EI applications for regular benefits increased by 9.6% nationally in April 2025 compared to the same month last year.

· Work-Sharing applications have significantly grown for the January to June period (more than 120% higher than for the same period last year), reaching a total of 967 applications, with 77% of them related to tariffs.
o 675 tariff-related agreements have been approved, expecting to help prevent around 9,500 layoffs and affect around 25,000 employees.
o Primary Metal Manufacturing and Fabricated Metal Products are the most vulnerable industry with the highest number of applications (151) with the majority in Quebec (39) and Ontario (85).

Parliamentary Studies (Fall 2024)

· Private Members Bill S-244 , An Act to amend the Department of Employment and Social Development Act and the Employment Insurance Act (Employment Insurance Council), was introduced in May 2022, by Senator Diane Bellemare. The Act would have created an advisory council, to be known as the Employment Insurance Council, to provide advice and make recommendations to the Canada Employment Insurance Commission on any matter relating to the powers, duties and functions of the Commission.

· HUMA study on seasonal workers: on October 8, 2024, introduced by the Bloc Québécois. The motion was unanimously adopted. Two meetings were held with external witnesses in the Fall.

· Private Members Bill C-418, An Act to Amend the Employment Insurance Act (accessibility and other measures) was introduced in November 2024 by Bloc Québécois seeking extensive changes to the EI program largely aligned with what was heard from labour stakeholders during EI Consultations.

EI Premium-Rate Setting Process

· EI premiums for 2025 are $1.64 per $100 of insurable earnings for employees, and $2.30 for employers, a 2-cent decrease from 2024. The process to set the rate for 2026 has begun and the rate for 2026 will be announced by September 12th, 2025.

If pressed on changes to the EI program:

• In addition to tariff actions, the Government has taken other important steps to modernize the EI program, including:

o Extending EI sickness benefits from 15 to 26 weeks;
o Introducing a new sharable benefit for adoptive parents, passed in Parliament in June 2024;
o Extending supports for seasonal workers in 13 targeted EI regions until October 2026; and,
o Supporting workers in Jasper and Bunibonibee Cree Nation communities impacted by the 2024 wildfires, until summer 2025.

• We will continue to be there for workers, and will continue to have an EI system that works for everyone.