One of Canada's biggest banks added its voice to a growing chorus calling on the federal government to change the country's employment insurance system [PDF].
Economists at TD Bank said Thursday Ottawa ought to make it easier for newly unemployed workers to receive benefits and should reverse changes it made to the formula that sets the premiums to be paid by employees and employers.
TD noted that under current rules, anyone applying for employment insurance benefits must have worked for a certain number of hours prior to becoming jobless. But the amount of hours required to qualify varies from region to region in the country, depending on the unemployment rate in that region.
TD economists Derek Burleton and Grant Bishop said this variable entrance requirement (VER) ought to be flattened so that in any region of the country where unemployment is less than 10 per cent, prospective recipients would have to have worked for 560 hours prior to making a claim.
Such a change comes with a price tag of $500 million, the bank said.
In some parts of the country, potential recipients must work as much as 700 hours.
The bank says that as result of the regional differences, only about 80 per cent of those who might be eligible for benefits actually receive them.
The Canadian Centre for Policy Alternatives, in a report published Wednesday, has calculated that more than half of those who will lose their jobs this year will not be eligible for EI benefits.
“We urge the government to immediately ease the VER,” the bank said.
If the government standardized the entrance requirement — making it the same in every region of the country — at 420 hours, that would cost about $1 billion, said the bank.
“One important benefit that flows is increased fairness. The truth of the matter is that during an economic downturn, it is no easier to find a job in a region with lower prevailing unemployment than in one with a higher unemployment rate,” the bank said.