Earnings Supplement Project (ESP) – Who Benefits From Unemployment Insurance in Canada: Regions, Industries, or Individual Firms?

November 2003


This working paper shows that from 1986 to 1996 the Canadian unemployment insurance (UI) program redistributed significant monies between industries and provinces and that there are a considerable number of firms in Canada that are predictably and persistently receiving subsidies through the UI program. Previous studies have shown that the major flow of funds is from the service industries toward the primary sector and construction and from Ontario toward the provinces east of it. Corak and Chen’s study corroborates those findings but moves beyond aggregate analyses and shows that a firm’s own behaviour, practices, or characteristics are twice as important as its industry or geographic location in explaining whether or not it is a net beneficiary of or net contributor to the UI program.