Getting Off the Rollercoaster: A Stable Funding Framework for the EI Program - EI Reform Part I

Colin Busby and Alexandre Laurin
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Colin Busby: C.D. Howe Institute
Alexandre Laurin: C.D. Howe Institute

No 81, e-briefs from C.D. Howe Institute

Abstract: While the public debate over reforms to Employment Insurance centres on regional fairness in eligibility requirements, it is critical that the EI program remain affordable in good times and bad. To avoid pro-cyclical EI premium decreases during booms and harmful premium increases during downturns, the challenge is to create a rate-setting mechanism that would balance the books over the ebbs and flows of economic cycles, and permit yearly EI account balances to vary. Ottawa also needs to introduce reforms that insulate the EI fund’s management from political interference – and protect that fund from governments that would dip into EI surpluses for general spending. One model is the Canada Pension Plan Investment Board.

Keywords: employment; insurance; reform (search for similar items in EconPapers)
JEL-codes: E24 J65 J68 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2009-06
New Economics Papers: this item is included in nep-ias and nep-mac
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Published on the C.D. Howe Institute website, June 2009

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