What Is Employment Insurance (EI)?

Employment Insurance (EI) is an unemployment insurance program in Canada that allows individuals who have recently lost a job to receive temporary financial assistance. Employment insurance can also be extended to individuals who are unable to work because of illness or who are caring for a young child or a seriously ill family member. In addition to financial assistance, the program assists the unemployed with job search services.

Understanding Employment Insurance (EI)

The Employment Insurance Act replaced the Unemployment Insurance Act of 1996. The updated scheme was designed to link unemployment benefits with wages and to reduce penalties for those who could only find temporary work. To qualify for benefits, individuals must work a certain number of hours, and the length of time for which benefits are provided depends on an individual's geographic region's unemployment rate. 

Employment insurance offers a wide range of benefits to those who qualify for them.

Employers contribute 1.4 times the amount of employee premiums. Since 1990, there has been no government contribution to this fund. The amount a person receives and how long they can stay on EI varies with their previous salary, how long they were working, and the unemployment rate in their area. 

EI maternity benefits are offered to biological mothers, including surrogate mothers, who cannot work because they are pregnant or have recently given birth, and parents of a newly adopted child.

A maximum of 15 weeks of EI maternity benefits is available, and according to the Canadian government website, if a child has been "born or placed with you" after March 17, 2019, you may be "eligible for 5 extra weeks of standard parental care benefits" or "8 extra weeks of extended parental benefits" depending on your circumstances.

Key Takeaways

  • EI benefits are offered by the Canadian government.
  • These benefits include not only maternity and parental care benefits but also 26-weeks of compassionate care benefits, for those citizens who have to leave work to care for a dying loved one.
  • Employment benefits in Canada include pensions and benefits for housing, training, education, for family leave, and people with disabilities.

Benefits can be paid as early as 12 weeks before the expected date of birth and can end as late as 17 weeks after the actual date of birth. The weekly benefit rate is 55% of the claimant’s average weekly insurable earnings up to a maximum amount.

EI sickness assistance provides benefits to people who are unable to work because of sickness, injury or quarantine. Applicants can receive up to a maximum of 15 weeks of EI sickness benefits.

EI also offers compassionate care benefits, which are paid to people who have to be away from work temporarily to provide care or support to a family member or who is gravely ill themselves with a significant risk of death. A maximum of 26 weeks of compassionate care benefits may be paid to eligible people.

Special Considerations

Over half of EI benefits are paid in Ontario and the Western provinces. However, EI is especially important in the Atlantic provinces, where there are more unemployed persons. Part of the reason why is that many Atlantic province workers are employed in seasonal work such as fishing, forestry, or tourism. They go on EI over the winter, when there is no work. There are special rules for fishermen making it easier for them to collect employment insurance.