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Less help from Employment Insurance

Less help from Employment Insurance

Posted on: 11/26/2018 | Author: ATB Financial's Economics + Research Team


As ATB Financial’s latest Economic Outlook shows, Alberta’s economy expanded by 4.4 per cent last year and is poised to grow by 2.3 per cent this year. That’s good news. Unfortunately, the unemployment rate remains high, averaging 7.9 per cent last year and 6.7 per cent so far this year.

As of September, there were about 177,000 unemployed workers in Alberta. This is down 16 per cent from September 2016 when the economy was in recession, but remains 59 per cent higher than in September 2014 before the downturn began. Given the currently low price of Alberta oil, the number of unemployed Albertans is unlikely to fall by very much next year and could even increase.

This is why news about the declining number of Employment Insurance (EI) recipients in Alberta is not a good sign. It signals reduced help as opposed to reduced need. The federal EI program only covers workers who have paid into it and who qualify by working a specified amount of time. Benefits also run out after a maximum number of weeks.

The proportion of unemployed Albertans receiving EI averaged 27 per cent in 2014 before the recession when the unemployment rate was below five per cent. The percentage of unemployed Albertans receiving EI benefits peaked in July 2016 at about 50 per cent. As of September, just 26 per cent of unemployed workers in our province were collecting EI.

The stubbornly high unemployment rate in Alberta, combined with the gap between the number of people out of work and those able to collect EI, is a good reminder that many of our neighbours are not only struggling to find work but may also be falling through the gaps in the social safety net.

EI, graph​​​

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