EI funds won't last through prolonged recession

by Tina Kells | September 18, 2008 at 02:23 pm

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Canadian actuaries are warning, should the turmoil in the U.S. financial markets throw Canada into a prolonged recession, current EI reserves won't last.

Actuaries calculate the cost of assuming risk, they are an essential part of any insurance program, and they also calculate how much risk can be covered. Canadian acruaries issued the ominous warning in reaction to the most recent developments in the U.S. banking crisis.

The Canadian Institute of Actuaries issued the warning amid growing fears that the Canada could be pushed into a recession by the economic slump and financial turmoil in the United States. A recession would put increased financial demands on the EI system, while the financial crisis - which has torpedoed stock markets around the world - has eroded the value of pension savings, which the actuaries say were already inadequate.

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