Alberta could create its own EI system to cover high-wage earners in volatile industries, report says

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High-wage workers are under-covered by Canada’s employment insurance system and should have a voluntary top-up option, according to a new research paper from the University of Calgary’s School of Public Policy.

And, if the federal government won’t do it, provinces like Alberta should consider creating their own parallel EI system, say the paper’s authors.

That’s because Albertans make significantly more money than people in the rest of the country but, when they lose their jobs, their maximum EI benefits are based on national income levels,

“Roughly speaking, that could mean the maximum weekly EI benefit in Alberta could be 20 per cent higher than the current rate,” Bev Dahlby and Mukesh Khanal write.

“This would mean larger payouts to some unemployed workers in Alberta, and it might require a higher EI contribution rate in Alberta to pay for the enhanced replacement rate.”

The authors suggest a parallel system would help Albertans who earn higher wages in volatile industries such as construction, manufacturing and oil and gas.

Such a system doesn’t currently exist, they note, “and if the federal government does not want to provide it, the provincial government could.”

The system should be voluntary because expecting low-wage workers to pay higher premiums to cover the costs of expanded benefits for high-wage earners would be a “regressive measure,” the report says.

Creating a parallel system could also more permanently address gaps in EI coverage that have cropped up in Alberta and other parts of the country, it adds.

In response to the oil downturn, the federal government responded with changes that expanded eligibility and extended  the maximum length of benefits for unemployed workers in some regions, including Alberta.

Prime Minister Justin Trudeau has said those changes will be “monitored and reviewed” as time goes on.

Source: CBC