Employment Insurance Monitoring and Assessment Report for the fiscal year beginning April 1, 2016 and ending March 31, 2017
Annex 3: Employment benefits and Support Measures data tables

Eligibility for Employment Benefits and Support Measures (EBSMs) or similar programs funded under Part II

In 2016 to 2017, to be eligible for Employment Benefits, individuals must be unemployed and have a current Employment Insurance (EI) claim as an “active EI client” or a claim that ended in the preceding three years as a “former EI client.” Those who began a maternity or parental claim in the preceding five years, after which they left the labour market to care for their newborn or newly adopted children, also qualify as former EI clients and are eligible for Employment Benefits upon re-entry into the labour market. Unemployed individuals who are neither active nor former EI clients are considered “non-insured” and are eligible to participate in Employment Assistance Services as well as self-services provided by the National Employment Service.

Labour Market Development Agreements (LMDAs)

LMDAs provide the frameworks within which EBSM delivery takes place. EBSMs are flexible by design, allowing provincial and territorial jurisdictions (P/Ts) to develop and deliver programs that respond to local and regional labour market needs. With the implementation of the Canada-Yukon LMDA on February 1, 2010, all provinces and territories are now fully responsible for the design and delivery of programs similar to EBSMs established under Part II of the EI Act. In support of these activities, Employment and Social Development Canada (ESDC) transfers LMDA funding to the provinces and territories and focuses on accountability, evaluation and ongoing policy development. ESDC also delivers Pan-Canadian programming and maintains, in partnership with the provinces and territories, specific projects and activities in the national interest under Part II of the EI Act. Canada retains responsibility for the delivery of insurance benefits under Part I of the EI Act and for the aspects of labour market development reflective of national interests.

Please visit the LMDA’s website for more information. For more information on LMDAs, please refer to: Labour Market Development Agreements.

Apprentices

Apprentices are paid by their employer during periods of practical training. During the classroom portion of their training, apprentices are eligible for regular benefits under Part I of the EI Act. The apprentice requires a referral under the authority of Section 25 of the EI Act to access these benefits. Depending on the regional and local priorities of the province or territory, the apprentice may receive EI Part II support to cover classroom-related expenses.

Aboriginal Skills and Employment Training Strategy (ASETS)

ESDC negotiates agreements with indigenous organizations to design and deliver employment programs and services for indigenous people at the community level. Aboriginal Skills and Employment Training Strategy (ASETS) is the successor to the Aboriginal Human Resources Development Strategy (AHRDS), which expired on March 31, 2010.

The sunsetting of AHRDS and the modernization of ESDC's Aboriginal labour market programming—through ASETS—coincides with ESDC’s process of modernizing the administration of grants and contributions. The ASETS advances labour market outcomes for First Nations, Métis, and Inuit via demand-driven skills development, strategic partnerships with provinces, territories and the private sector, and via increased accountability. It also supports the development of a skilled Aboriginal workforce, which is one of the Aboriginal Economic Development Framework’s objectives.

Job Bank

Job Bank is an Internet service that helps connect employers and workers. It is the largest web-based network of job advertisements across Canada and is available to Canadian employers and job seekers free of charge. See Job Bank.

Employment benefits

Targeted Wage Subsidies assist insured participants to obtain on-the-job work experience by providing employers with financial assistance toward the wages of participants. This benefit encourages employers to hire unemployed individuals whom they would not normally hire in the absence of a subsidy.

Self-Employment provides financial assistance and business planning advice to EI-eligible participants to help them start their own business. This financial assistance is intended to cover personal living expenses and other expenses during the initial stages of the business.

Job Creation Partnerships projects provide insured participants with opportunities to gain work experience that will lead to ongoing employment. Activities of the project help develop the community and the local economy.

Skills Development helps insured participants to obtain employment skills by giving them direct financial assistance that enables them to select, arrange for and pay for their own training.

Targeted Earnings Supplements encourage unemployed persons to accept employment by offering them financial incentives. Quebec offers a similar measure—Return to Work Supplement—to help with expenses related to returning to work (for example, new tools, office materials or clothing).

Support measures

Employment Assistance Services provide funding to organizations to enable them to provide employment assistance to unemployed persons. The services provided may include individual counselling, action planning, job search skills, job-finding clubs, job placement services, the provision of labour market information, case management and follow-up.

Labour Market Partnerships provide funding to help employers, employee and employer associations, and communities to improve their capacity to deal with human resource requirements and to implement labour force adjustments. These partnerships involve developing plans and strategies, and implementing adjustment measures.

Research and Innovation supports activities that identify better ways of helping people to prepare for or keep employment and to be productive participants in the labour force. Funds are provided to eligible recipients to enable them to carry out demonstration projects and research for this purpose.

1. Study objective and methodology

Incremental impacts of EBSMs represent the direct effect of program participation on participants’ labour market experience (that is, earnings from employment/self-employment, incidence of employment and use of EI) after participation. The role of the incremental impact analysis is to isolate the effects of participation from other factors such as inflation, economic cycles, layoff, etc. In order to achieve this, the incremental impact analysis compares the labour market experience of participants before and after their participation, with that of non-participants before and after the same period (see diagram).

Text description of Example of Incremental Impact Calculation

Participants
Average annual earnings

• Before participation
  = $30,000
• After participation
  = $38,000
• Change in earnings
  = +$8,000

Comparison group
Average annual earnings

• Before participation period
  = $31,000
• After participation period
  = $36,000
• Change in earnings
  = +$5,000

Incremental impact

• (Change due to program participation)
• +$3,000
  (i.e., $8,000 - $5,000)

The analysis covered up to 100% of active and former claimants who started their participation in EBSMs between January 1, 2007 and December 31, 2008 or between January 1, 2006 and December 31, 2008. This analysis was conducted at the national level with participants from the 13 PTs. It was also conducted at the provincial level for 9 provinces. Results were not produced for Quebec since the Quebec Government is responsible for evaluating its LMDA^{Footnote 1}. As well, it was not possible to produce incremental impacts for the territories because the number of participants was too low to generate reliable results. The 2007 to 2008 reference period was used at the national level as well as in provinces where the number of participants was sufficient to produce results. The period was extended by one year (2006-2008) in other provinces in order to increase the sample size. Despite adding this year, the number of participants for some EBSMs was still too low to generate impacts for those program and services.

The analysis was conducted using linked administrative data from EI Part I and II and the Canada Revenue Agency (CRA). The comparison group was composed of active claimants who were eligible to participate in EBSMs but did not start participation in 2007 or 2008 or between 2006 and 2008.

The impacts of EBSM participation on improving the labour market experience of participants were measured using the following indicators:

• Average earnings from employment and/or self-employment: An increase in earnings indicates that participants improved their employment situation by either working more hours or by having a better paying job than they did before participation.
• Incidence of employment (that is incidence of having earnings from employment and/or self-employment): Measures whether participants were more likely to be employed after participation. A gain means that a higher proportion of participants were employed after participation than they would have been if they had not participated or if they had received minimal employment services.
• Amount of EI benefits received: Measures the average amount of EI benefits collected.
• Average number of weeks in receipt of EI: Measures the average number of weeks participants spent on EI.

The same methodology was used at national and at the provincial levels.

2. National results

The following presents results at the national level and for the 9 provinces covered by this analysis. The national results are presented along with a text description to help readers understand how to interpret the results. The provincial results are presented in table format only. Since different reference periods were used at the national level and across provinces (that is, 2007 to 2008 or 2006 to 2008) the results are not directly comparable.

The national analysis covered active claimants in the 2007 to 2008 period. Key results are as follows:

Skills Development (SD): As shown in Table 1 below, SD participants experienced earnings gains in each of the three years after participation but those increases became larger over time. The incremental gains averaged $2,300 per year. Active claimants also had an average incremental increase of 4.7 percentage points in their incidence of employment in the three years following participation. As well, SD participation resulted in lower use of EI benefits. The incremental decreases averaged $400 per year.

Targeted Wage Subsidies (TWS): Active claimants had incremental gains in earnings in each of the three years following the end of their TWS participation averaging $1,300 per year. These gains were accompanied by incremental increases in incidence of employment in each year after participation averaging 6.1 percentage points per year. Most impacts on EI benefits collected were not statistically significant at the 95% level. In this context, it is not possible to draw any clear conclusion about TWS effectiveness in reducing the use of EI after participation.

Self-Employment (SE): Over the three-year period following the end of their participation, active claimants had an average incremental reduction of $10,200 per year in their earnings from employment and/or self-employment and a reduction of 19 percentage points per year in their incidence of employment.

The earnings results should be interpreted with caution, as they may not fully capture the financial situation of participants. Impacts were examined using individual earnings reported in the T1 and T4 taxation files from CRA, and measured relative to active claimants who did not participate in SE and may have been in any employment/unemployment situation following participation (for example, unemployed, paid employee or self-employed). According to a study from Statistics Canada, self-employed individuals in Canada have a lower average annual income than paid employees ($46,200 versus $52,400 in 2009), but the average net worth of their households is 2.7 times that of the paid employee households, which indicates that some self-employed individuals may leave funds within their business for reinvestment purposes.^{Footnote 2} Since the incremental impacts of SE were measured relative to a comparison group that also included paid employees and did not take the net worth of participants and comparison cases into account, the results may not be fully reflective of the financial situation of SE participants after their participation.

The incremental impact analysis also shows that SE participants collected $1,600 less in EI benefits per year on average. Those results should also be interpreted carefully since the time worked under self-employment does not allow self-employed Canadians to qualify for regular EI benefits.

Job Creation Partnerships (JCP): Participation in JCP improved active claimants’ earnings by an average of $1,200 per year. They also had incremental increases in the incidence of employment in each of the three years after participation, averaging 4.9 percentage points per year. As well, on average, active claimants collected $300 less in EI benefits annually.

Employment Assistance Services only (EAS-only): Impacts were measured for the active claimants who only participated in EAS without receiving other programs or services. EAS participation was effective at helping active claimants to return to employment. Incremental impact results show that they improved their incidence of employment, while reducing their use of EI in the three year period after participation. Specifically, they had an average incremental gain of 0.6 percentage points per year in their incidence of employment, as well as average incremental decreases of $390 per year in their use of EI benefits.

Active claimants had incremental decreases in their earnings averaging $465 per year. However, the result should be interpreted with caution, as EAS is a short term and low intensity measure that is not focused on human capital development. EAS mostly includes services such as counselling, help with job search, development of return-to-work action plans and, in some cases, very short training such as first aid. In this context, it may not be reasonable to expect that participation in EAS-only would result in improving participants’ earnings. However a recent evaluation on the timing of participation in EAS showed that participants who started their EAS within four weeks after initiating an EI claim had earnings gains in both the short- and medium-term after participation and achieved quicker return to employment.

Overall, results at the national level are similar to those in the provinces, with modest differences.

• Significance level *** 1%; ** 5%; * 10%
• ¹ Earnings results for Self-Employment should be interpreted with caution. They may not fully capture the financial wellbeing of participants. The impacts were examined using individual earnings reported in the T1 and T4 taxation files from CRA, and measured relative to active claimants who did not participate in SE and may have been in any employment/unemployment situation following participation (that is, unemployed, paid employee or self-employed). According to a study from Statistics Canada, self-employed individuals in Canada have a lower average annual income than paid employees ($46,200 versus $52,400 in 2009), but the average net worth of their households is 2.7 times that of the paid employee households, which indicates that some self-employed individuals may leave funds within their business for reinvestment purposes.^{Footnote 3} Since the incremental impacts of SE were measured relative to a comparison group that also included paid employees and did not take the net worth of participants and comparison cases into account, the results may not be fully reflective of the financial wellbeing of SE participants after their participation. As well, the decreases in EI use may be due to EI eligibility effect as self-employed Canadians cannot qualify for regular EI benefits.