Nowadays they contract this work to various community agencies...and constantly squeeze them to "do more with less".
You are SO right. I worked for one of those agencies in Toronto, providing HRDC services, and they squeezed every last nickel from everything we did. During that big HRDC scandal where they blew all that money and couldn't show anything for it, those of us in the agency I worked for were shaking our heads in amazement, because it's not like we ever saw any of it.
If they had put that money into the employment counselling and job finding programs that we were running on a shoestring, but that people actually found helpful (and yes, they DID find it VERY helpful, most of our clients loved the services we provided when they were actually able to access them), it would have been extremely helpful to a lot of people.
The EI programs that are out there are really great. I worked in them for a long time, and I've taken advantage of them when unemployed. But the problem is, they're so starved for resources that they just can't provide proper care for the number of clients they get. Employment Resource Centres (ERCs) only allow you an hour a day to use the computer, and only 10 printouts a day. One hour to compose and type up your resume, tailor-compose your cover-letters, and use the internet for job search. Anyone who has had to look for work recently (which I am right now) knows that you just can't get anything done in an hour - or at least, not nearly enough.
Luckily I have a computer, printer, and high speed internet at home. I easily spend four or five hours a day, searching job sites for likely positions, then writing individual cover letters (generic ones won't do if you want the job), and often tailoring my resume to whatever position is asked for. I have about 4 versions of my resume so far, and even they need to be "tweaked" for some of my job applications.
You can't do all of that in an hour a day. It has to be recognized that the way people search for work has changed, and much more computer time is needed. You don't just do a resume and run off 200 copies of it anymore. Hell, a lot of jobs you can only apply for online anyhow.
As for employment counselling - we had so few counsellors that at times we were booking a month or two in advance. And those counsellors were the ones who referred people to the EI services - they had to be assessed to see what they needed most. People who came to see the employment counsellors were often helped a great deal by them - at least, that's the feedback we got - but just getting in to SEE an employment counsellor took forever, and then getting into the next free spot in a program like a job finding club (which, btw, are excellent) took another while - and meanwhile, weeks to months are passing by, unemployed! And all because HRDC comes up with these pretty good programs, and then starves them so that it takes forever for people to access them.
A pity. HRDC COULD be a really incredible resource for people. In many cases it IS a great resource when you finally get your crack at the services. But it could be so much better if they would spend the money on the programs that work instead of giving it to their buddies for non-existent contracts who blow it on nothing.