The Budget in Brief 1995 - 7
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Archived - Unemployment Insurance Reform

"We need to move away from passive support - away from dependence - and move towards active assistance - towards independence."

"A key job for unemployment insurance in the future must be to help Canadians stay off unemployment insurance."

Building on measures in the 1994 budget, the Minister of Human Resources Development intends to table legislation this fall to make further changes to unemployment insurance. The changes will move current program funding into the areas of unemployment insurance which enhance the employability of Canadians, contribute to a healthy economy and encourage job creation.

Canada's strong economic performance and unemployment insurance reform, which the government intends to have in place no later than July 1, 1996, will reduce the overall size of the program by a minimum of 10 per cent. This overall reform, combined with improvements in the administration of the unemployment insurance program, will secure savings of $700 million in 1996-97. Reform will be designed and carried out in a manner that eases the transitional impact of changes in provinces where there is a history of reliance on unemployment insurance.

With no increase in premium rates, the cumulative surplus in the Unemployment Insurance Account will be allowed to rise above $5 billion through to the end of 1996. This surplus will be maintained and will serve as a buffer to mitigate unemployment insurance premium rate increases during periods of slowing economic growth. The result of these measures will be a unemployment insurance program that does a much better job of investing in people, and lower, more stable unemployment insurance premium rates that encourage job creation.

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