Statistics Canada said Monday only 78.4 per cent of unemployed Canadians were eligible for benefits last year, at about the time when the government saved about $1.9 billion in EI payouts.
The rate is the lowest since the agency started collecting comparable data in 2003, and it's down from 83.9 per cent the previous year.
"This is another signpost that the EI system is fundamentally flawed and the government needs to get serious about comprehensive EI reform," said NDP critic Chris Charlton.
"What we're seeing is that far too many people are working in part-time, temporary and precarious jobs, so clearly folks who used to have decent jobs are now accepting (part-time work) and don't qualify for EI when they lose those."
She added that the benefits are not government money, but funds Ottawa collects from workers and employers to support Canadians who lose their jobs.
The problem will likely get worse, said Liberal labour critic Rodger Cuzner, given that changes introduced this year will compel repeat EI beneficiaries to travel further afield for jobs, or to take work that pays less.
"I hate to the ominous voice of doom, but the changes they've made... are going to hurt families and will have a big impact on provincial welfare rolls," he said.
Current rules require EI contributors to have worked 420 to 700 hours, depending on the unemployment rate in their region, to qualify for benefits. First-time employees, or those with limited work experience in the past two years, need 910 hours.
Given the relatively high 7.4 per cent unemployment rate and elevated levels of part-time workers — about 19 per cent — eligibility rules need to be relaxed, the critics said.
The Canadian Labour Congress, as well as the NDP, has proposed a 360 hour threshold, which would capture many laid off part-timers.
In the Commons, Conservative MP Kellie Leitch defended the program, noting that almost 80 per cent of those eligible did qualify for benefits.
Monday's report found there was on average of 1.34 million people unemployed in 2011. Of those only 867,000 were contributors to EI and only 695,000 lost their jobs involuntarily and hence were eligible for benefits. And of those, 545,000, or 78.4 per cent, received benefits.
As a percentage of all unemployed, only 40.6 per cent were eligible for EI in 2011.
On average, the eligibility rate was highest for older workers, although the core 25-54 working age group also saw the eligibility rate fall from 89.9 per cent to 81.7.
But among youth, those more likely to be impacted by the higher first-time worker requirement, only 42.1 per cent were eligible in 2011.
Women were also highly impacted, with the eligibility rate dropping to 77 per cent from 84.4.
Bank of Montreal economist Doug Porter said the numbers could also be interpreted to show that fewer permanent full-time workers are losing their jobs — but he agrees that the more vulnerable workers are being left out in the cold.
"Often times, it is the last in, first out," Porter said. "It shows that the people who are often let go first are the people least firmly attached to their jobs."
Economist Erin Weir, president of the Progressive Economics Forum, said the report is more evidence that Canada's labour market is not as healthy as the government has portrayed it.
According to Statistics Canada, the economy added 229,000 jobs over the past 12 months. But the number fails to capture population and labour market growth, which has outstripped the employment increase.
That's why in the same period, the number of Canadians officially unemployed rose by about 36,000 to 1.4 million.
"That's one of the big stories since the recession is that the Canadian economy has really not created enough jobs to keep pace with growth in the labour force of the working age population," Weir said.