The report by a task force from the University of Toronto's Mowat Centre says the EI system is complex, opaque and not easily understood by contributors.
It says the current program has failed to keep up with societal and economic change and it's widely recognized that there are deep problems at the core the system.
Too many people, it says, are being left out of the social safety net, too many are carrying an unfair burden and too many are not achieving their potential.
The task force, co-chaired by former Saskatchewan premier Roy Romanow, found only 46 per cent of the country's unemployed received EI benefits last year, compared with 86 per cent in 1981.
It also says EI is the only federal program that relies on region of residence as a basis for determining benefits — a particularly poor criterion, says the panel.
"Other important federal social programs, like Old Age Security and the National Child Benefit, treat Canadians equally regardless of region of residence," it notes.
Furthermore, it says many of those who would benefit most from training are not eligible for federally funded programs because they do not meet EI criteria.
The panel also included co-chair Ratna Omidvar, president of the Maytree Foundation and Keith Banting, a leading social-policy scholar who served as its research director.
The group commissioned several independent research papers on EI, each of which addressed a different area of the system and presented possible options for reform.
It identified seven objectives to guide an income-security program for workers, including the need for transparency, fiscal responsibility, sensitivity to economic conditions and changes in employment and to provide adequate support when required.
Its report makes 18 recommendations aimed at making the EI program "more equitable, more transparent, and more consistent with the contemporary labour market."
"They are designed to be a source of national unity, rather than inter-regional disputes," it says.
Among its recommendations:
— A single EI entry requirement and benefit duration range for all workers, reducing both region- and industry-specific subsidies, increasing transparency and restoring fairness to the system.
— New federal temporary unemployment assistance for the "substantial number" of unemployed workers who don't qualify for EI benefits and are ineligible for provincial social-assistance programs.
— More flexibility in special benefits to help the disabled remain in the labour force, more choice for parents when taking parental leave, fair treatment of temporary foreign workers and suggestions for improved financing and management.
"The recommendations should be considered as a package with all proposals adopted simultaneously," says the report.
"While the recommendations would lead to a modest increase in federal spending, the proposed system could be calibrated to suit governmental preferences on generosity and incentives and to reflect the state of the economy."