the benefit pays $6496 annually for each child under the age of 6 and
$5481 annually for each child between 6 and 17. The benefit declines as
the family’s net income rises, and disappears altogether for net incomes of
about $200 000 (depending on the number and age of the children).
Employment Insurance
Employment insurance (EI) is a federal program designed to provide
temporary income support to workers who lose their jobs. Employers and
employees remit EI premiums to the government equal to a small
percentage of wages and salaries. These premiums then finance the EI
payments to unemployed workers who qualify for the benefits. In boom
times, when there is little unemployment, the total amount of EI
premiums collected exceeds the total amount dispersed as EI benefits; in
times of high unemployment, the benefits exceed the premiums. As a
result, the EI program is approximately self-financing over the duration of
the average six- to seven-year business cycle.
In its current form, the EI system provides workers with incentives to
remain in seasonal jobs and in areas with poor employment prospects for
longer than would otherwise be the case. In some extreme cases, the
individuals are accused of taking EI-financed “holidays.” That the EI
system encourages behaviour that increases unemployment and reduces
regional mobility does not mean that the unemployed themselves are
responsible for the abuses of the system that sometimes occur. The
responsibility lies with those who designed the incentives and those who