Unemployment in the days of Covid: will the Canadian unemployment insurance program survive the pandemic?

Abstract

Governed by Austerity, the Canadian unemployment regime stopped delivering a proper wage replacement coverage starting in 1995. Nowadays, the situation is far from showing better results. For the year 2018-2019, only 40% of those who contributed through their wages to the Unemployment Fund were deemed eligible to an unemployment benefits period. Without any surprise, precarious workers had been largely denied such benefits. Those same workers are often active in the service sector, a sector that largely contributes to the GDP increase in Canada. In the Covid context, Canada looked for income replacement answers outside the Unemployment regime and relied on social tax expenditures by creating programmes that showed their flexibility and agility. Those who had to stop working or reduce their working hours - either because they were affected by the virus or had to take care of an affected member of their household - were well served by those programmes. Are social tax expenditures, also called cash transfer programmes, showing the way for the future? Or, can a contributory model like the unemployment regime in Canada adapt to the needs of the workers in the post Covid era?