1. Legal Framework
Citizens and landed immigrants have significant health care coverage, unemployment insurance coverage and pensions for retirement, generally covered by public funds and payroll taxes. Many employers provide additional benefits, dental care, disability coverage, and pension contributions.
2. Required Contributions
Most basic health care services are covered by provincial health insurance. However, prescription drugs are not paid for by the provincial health insurance plan. Many employers offer some form of insurance plan that employees are permitted to participate in. The employer may bear some or all of the cost of insurance premiums for employees.
Employment Insurance (“EI”) is available for Canadians who have lost their jobs. Employers are required by law to deduct and remit EI premiums from employees’ income, and are also required to make contributions on behalf of their employees. EI provides income replacement benefits for employees who have lost their jobs through no fault of their own. Therefore, EI is generally not available to employees who have been terminated for just cause. The current weekly benefit amount for a claimant is 55% of the average weekly earnings from the previous calendar year to a maximum weekly benefit of $537.
Specialized EI coverage is also available for employees who are unable to attend work because of illness, because they have taken a compassionate care leave to care for a family member who is gravely ill with a significant risk of death, or a leave to care for a critically ill child. Under employment standards legislation, employers are not required to pay employees during these types of leave, however many employers do provide additional benefits to employees.
Further, each province provides some form of support for persons with disabilities who are in financial need. This will only be available to persons who have significant long-term impairments that restrict their ability to work, care for themselves, or take part in community life.
Additionally, each province in Canada operates a provincial workers’ compensation system which is, in effect, an insurance system. It should be noted that there is no federal workers’ compensation system. Accordingly, if eligible for coverage, employees in the federal jurisdiction are covered by the provincial workers’ compensation system that exists in the province in which they are employed. Participation is compulsory for employers. The system creates a trade-off, whereby employees injured on the job receive coverage, and in return, lose the right to sue their employers with respect to the injury.
As noted above, EI is available to Canadians who have lost their employment, and specialized EI may be available to employees who are unable to attend work for another prescribed reason, such as compassionate care leave. Some form of long-term disability insurance is also available in every province.
4. Required Maternity/Sickness/Disability/Annual Leaves
Maternity leave and parental leave is addressed under employment standards legislation in each province. EI is available for employees who are pregnant, have recently given birth, are adopting a child, or are caring for a newborn. Because EI benefits provide only a portion of an employee’s regular wages, many employers offer “top up” benefits to employees for some portion of their leave.
Many jurisdictions also provide a variety leaves based on illness, disability, or the illness or disability of a family member. Employers are generally not required to pay employees for these leaves of absence, though employees may be entitled to EI benefits for some period of their leave. Many employers provide workplace sickness and disability insurance to employees in order to complement benefits payable under a federal or provincial statutory scheme; however, employers are not legally required to provide such additional benefits.
5. Mandatory and Typically Provided Pensions
Almost all individuals who work in Canada contribute to the Canada Pension Plan (CPP), which is a defined benefit plan. Employers are required by law to deduct and remit CPP contribution from employees’ income. Employers are also required to make contributions to CPP on behalf of their employees. Employees may apply for and receive a full CPP retirement pension at age 65. Alternatively, employees may receive a reduced pension at 60, or as late as 70 with an increase. Many employers and employees participate in workplace pension plans or group RRSP arrangements in order to supplement employees’ CPP entitlements.