Employment Insurance is one of Canada’s largest social programs, providing temporary financial assistance to eligible workers who lose employment or experience other qualifying circumstances. But as the program handles millions of applications each year, the federal government continues to face the challenge of detecting fraud, recovering improper payments and protecting public funds.
The latest federal figures show that $279.2 million in fraudulent Employment Insurance overpayments were established during the 2024–25 fiscal year. That was an increase from the $242.6 million established in 2023–24.
At the same time, fraudulent overpayments represented about 1% of the $23.3 billion in total EI benefit expenses during 2024–25. The figures therefore point to a substantial amount of identified fraud, but they do not mean that 1% of Canadians receiving EI are committing fraud. Nor do they establish that the overall prevalence of fraud is increasing.
Instead, the numbers illustrate the scale of the government’s ongoing effort to identify improper claims while maintaining access to benefits for Canadians who legitimately qualify.
How much EI fraud is being detected?
Employment and Social Development Canada (ESDC), the federal department responsible for administering EI, reported $279.2 million in established fraudulent EI overpayments in 2024–25. Of that amount, $59.5 million was recovered during the fiscal year.
The previous year, ESDC established $242.6 million in fraudulent EI overpayments.
That represents an increase of roughly $36.6 million, or about 15%, in the amount of fraudulent overpayments established from one year to the next.
However, the increase needs to be put into context.
The federal government reported that fraudulent EI overpayments represented approximately 1% of total EI benefit expenses in 2024–25. In other words, the vast majority of EI spending was not identified as fraudulent.
The government also cautions that losses identified through its integrity activities can reflect investigations and detection efforts, meaning that changes in the amount detected do not necessarily translate directly into changes in the underlying rate of fraud.
For that reason, it would be misleading to conclude from the latest figures alone that EI fraud is suddenly becoming widespread in Canada. What the data clearly demonstrates is that the government continues to identify hundreds of millions of dollars in fraudulent overpayments each year.
What counts as EI fraud?
Not every EI overpayment is fraud.
An overpayment can occur for several reasons. A claimant may make an innocent mistake, an employer may provide incorrect information, or Service Canada may make an error while processing a claim.
Fraud or misrepresentation involves a different standard. According to the federal government, it can occur when someone knowingly withholds information or makes a false or misleading statement in order to receive benefits.
Examples of conduct that can lead to an investigation include:
- Failing to report employment or earnings while receiving EI
- Failing to declare self-employment income
- Failing to report periods when the claimant was unavailable for work
- Misrepresenting the reason for leaving a job
- Failing to report time spent outside Canada
- Providing false information in connection with an EI claim
- Claiming certain sickness benefits without meeting the applicable requirements
The distinction between an honest mistake and intentional misrepresentation is important. A person who accidentally enters the wrong earnings amount on an EI report is not automatically committing fraud.
Government guidance specifically recognizes that mistakes happen and instructs claimants to contact Service Canada if they discover an error.
Why detecting EI fraud can be difficult
The scale and complexity of the EI program make fraud detection an ongoing challenge.
During 2024–25, Service Canada processed more than 3.2 million EI claims.
The government’s published figures measure established fraudulent overpayments and compliance investigations, but they do not establish what proportion of EI applications were fraudulent.
At the same time, the federal government has to determine whether information supplied by claimants accurately reflects their employment, earnings, availability and other circumstances affecting eligibility.
The government says it uses a combination of controls, data analysis, investigations and other integrity measures to identify potentially problematic cases.
This creates a difficult balance: controls need to be strong enough to prevent abuse, but legitimate claimants still need to be able to access benefits without unnecessary delays or barriers.
More than 162,000 EI compliance investigations in 2024–25
One of the government’s primary tools for addressing improper EI payments is the compliance investigation.
ESDC conducted more than 162,000 EI compliance investigations in 2024–25.
That was actually lower than the more than 174,000 investigations conducted during 2023–24. The decline in the number of investigations therefore should not be interpreted as evidence that enforcement is weakening.
According to ESDC, the number of investigations can vary from year to year depending on the nature and significance of identified risks.
The department says compliance investigations typically identify intentional errors involving undeclared work and earnings, while other common issues include unreported periods of unavailability, inaccurate information about job separation and unreported absences from Canada.
EI investigations generated hundreds of millions in savings
The government’s broader integrity activities also produced significant financial savings.
ESDC reported $453.6 million in savings from EI integrity activities during 2024–25, compared with $351.4 million in 2023–24.
These savings are broader than the $279.2 million in established fraudulent overpayments. They can include amounts identified through compliance activities and other measures designed to prevent or recover payments to which claimants were not entitled.
The distinction matters because not every dollar saved through an integrity activity represents a criminal fraud case.
The federal government describes its approach as increasingly focused on identifying risks earlier in the benefit process rather than relying solely on investigations after payments have already been issued.
Canada is shifting toward preventing fraud before payments are made
The federal government has been moving toward what it calls an “Integrity-by-Design” approach.
Rather than relying exclusively on post-payment investigations, ESDC says it is incorporating fraud-prevention measures into the design and delivery of programs.
The department has also expanded its use of data analytics and automated tools to identify higher-risk cases.
The department also maintains separate teams focused on fraud prevention and enforcement. The enforcement team investigates suspected cases where criminal or other legal liability may be involved, with serious cases potentially referred to law enforcement.
That shift is significant because preventing an improper payment before money leaves the program can be more effective than attempting to recover it afterward.
What about fraud from the COVID-19 period?
Some of Canada’s most significant benefit-integrity challenges originated during the COVID-19 pandemic, when emergency programs were introduced at unprecedented speed.
The government has continued reviewing pandemic-era Employment Insurance Emergency Response Benefit (EI ERB) payments.
During 2024–25, ESDC completed 73,454 post-payment verifications related to the EI ERB and identified approximately $166.6 million in savings.
Since the 2021–22 fiscal year, the department says it has completed more than 164,000 EI ERB post-payment verifications, resulting in estimated savings of $456.8 million.
These figures demonstrate that the government is still dealing with the financial consequences of emergency benefit programs introduced years earlier.
They also highlight why rapid benefit delivery can create difficult trade-offs between getting money to people quickly and conducting extensive eligibility checks before payment.
What happens if someone commits EI fraud?
The consequences of deliberately providing false information can extend well beyond repaying the benefits.
According to Service Canada, someone who knowingly makes a false or misleading statement can face a monetary penalty. The penalty can be as high as 150% of the overpayment, or three times the weekly benefit rate for each false statement, whichever amount is lower.
A violation can also be recorded on the person’s EI file. That can increase the number of insurable hours they must accumulate before they qualify for regular EI benefits again. Service Canada’s published framework says the increase is 25% more hours for a minor violation, 50% for a serious violation, 75% for a major violation, and 100% if there is already a violation on the file.
In serious circumstances, prosecution may also be possible.
However, an important distinction remains: an overpayment by itself does not establish that someone committed fraud. The government must consider whether the information was deliberately misrepresented when determining whether a penalty or other sanction is appropriate.
What if someone accidentally receives too much EI?
Mistakes can happen, particularly when a claimant’s circumstances change while receiving benefits.
For example, someone may estimate their weekly earnings incorrectly, forget to report income, enter the wrong number or make another unintentional reporting error.
An accidental overpayment generally still has to be repaid because the claimant received money they were not entitled to. But an ordinary overpayment is not automatically treated as fraud.
The federal government advises claimants to notify Service Canada as soon as they discover a mistake or a change in circumstances that could affect their EI claim.
Doing so can help correct the file and prevent additional problems. In some circumstances, voluntarily disclosing a misrepresentation before an investigation begins may also affect whether penalties or prosecution are pursued.
How does Canada detect possible EI fraud?
EI integrity investigations can involve information from several sources.
The government uses data analysis and risk-based processes to identify cases that may require additional examination. Claim information can also be compared with other information available to government departments and agencies.
The purpose is not simply to identify people who received an overpayment. Investigations are intended to determine whether a claimant met the requirements for the benefits received and, where appropriate, recover money that was improperly paid.
This is particularly important because the government must distinguish between deliberate attempts to obtain benefits and mistakes made during the application or reporting process.
ESDC says its integrity strategy increasingly focuses on identifying higher-risk cases early and directing investigative resources toward them.
Is EI fraud increasing in Canada?
The answer depends on what is being measured.
The amount of established fraudulent EI overpayments increased from $242.6 million in 2023–24 to $279.2 million in 2024–25.
However, that does not by itself prove that the underlying rate of fraud among EI recipients increased.
The number of compliance investigations actually fell from more than 174,000 to more than 162,000 during the same period.
At the same time, Service Canada processed more than 3.2 million EI claims in 2024–25.
These figures demonstrate why claims that EI fraud is simply “surging” would go beyond what the government’s data establishes.
A more accurate conclusion is that the federal government identified more fraudulent EI overpayments in dollar terms in 2024–25, while continuing to treat program integrity and fraud prevention as significant priorities.
Why EI fraud matters to Canadians
Employment Insurance is funded through premiums paid by workers and employers, and the program provides an important financial safety net to people who meet its eligibility requirements.
Protecting the program from fraud therefore matters for both taxpayers and legitimate claimants.
Money paid to people who are not entitled to receive it cannot be used for legitimate EI claims, while aggressive enforcement that incorrectly penalizes honest claimants could undermine confidence in the program.
The government’s challenge is therefore not simply to find more fraud. It is to detect intentional abuse accurately while ensuring that eligible Canadians continue to receive the benefits they are entitled to.
The scale of the program makes that balance particularly important. More than 3.2 million EI claims were processed during 2024–25, demonstrating the scale of the system’s activity each year.
The bottom line
Employment Insurance fraud remains a significant concern for the Canadian government.
In 2024–25, ESDC established $279.2 million in fraudulent EI overpayments, up from $242.6 million the previous year. The government also conducted more than 162,000 compliance investigations and identified $453.6 million in savings through EI integrity activities.
Those numbers are substantial, but they need context.
Fraudulent overpayments represented approximately 1% of total EI benefit expenses, and the available figures do not establish that fraud is becoming widespread among Canadian EI recipients.
What they do show is that the federal government continues to devote considerable resources to detecting improper claims, recovering overpayments and preventing fraud before payments are made.
For Canadians who legitimately qualify for Employment Insurance, the objective is straightforward: preserve access to the benefits they have earned while making it increasingly difficult for those who deliberately attempt to exploit the system to succeed.
SOURCES: ESDC, Employment Insurance Monitoring and Assessment Report 2024–25 (highlights and Chapter 4); Service Canada, Employment Insurance and overpayments; Service Canada, Employment Insurance and fraud and serious violations.
