Several media outlets have reported that Canada’s Parliamentary Budget Officer (PBO) announced a sharp rise in employment insurance rate. This stems from the recently tabled report: Projecting Employment Insurance Premium Revenues and Expenses made available on April 15, 2010.
The PBO projects that EI premium rates for employees will increase by the maximum allowable amount of $0.15 per year to $2.33 (per $100 of insurable earnings) by 2014 from $1.73 in 2010. This $0.60 increase in the premium rate is projected to raise the annual contribution per worker by $535, on average ($223 borne by the employee and $312 borne by the employer).
The combination of the increased premiums, more workers and higher wages means that Ottawa’s EI revenues would grow from $16.2 billion last year to $27.1 billion by 2014. Despite this increase, the budget officer estimates that even then the fund would still carry a $700-million deficit by 2014 after hitting a peak shortfall of $10.7 billion in 2011.
Currently, the government has frozen contribution premiums until 2011 as part of the two-year stimulus package dealing with the recession.
The report is quite informative and should be consulted.
Note: The Parliament of Canada Act mandates the Parliamentary Budget Officer to provide independent analysis to the Senate and House of Commons on the state of the nation’s finances, government estimates and trends in the national economy.
Human Resources and Compliance Managing Editor