On October 14, 2008, the Canada Employment Insurance (EI) Commission released the Report of the Chief Actuary to the EI Commission on the EI Premium Rate and Maximum Insurable Earnings. The report will be considered by the EI Commission in its determination of the EI premium rate for 2009. The Chief Actuary is required to provide this report including the "break-even" rate to the EI Commission by no later than October 14 of each year. In any given year the premium rate cannot change by more than 0.15% ($0.15 per $100 of insurable earnings) from the previous year's rate. Therefore, since the 2008 premium rate was set at 1.73%, the 2009 premium rate shall not be less than 1.58% and not greater than 1.88%. According to the Commission, the Employment Insurance premium rates that should generate just enough premium revenue for 2009 to cover payments to be made during the same year are as follows:
- 1.38% (compared to 1.39% for 2008) is the forecasted Employment Insurance break-even rate for 2009 for residents of provinces with a Provincial Plan;
- 0.35% (compared to 0.34% for 2008) is the rate of premium reduction granted by the Employment Insurance Act for 2009 for residents of provinces with a Provincial Plan; and
- 1.73% (same as for 2008) is the forecasted Employment Insurance break-even rate for 2009 for residents of provinces without a Provincial Plan, which is 1.38% plus the premium reduction of 0.35% granted to Provincial Plans.
The data source, methodology and assumptions used to determine these rates are described in Appendices II and III of the report.
The annual maximum insurable earnings for 2009 is set at $42,300 compared to $41,100 for 2008. For information on how this amount was calculated, www.hrsdc.gc.ca/en/employment/ei/premium_rate/2009/appendix_1.shtml.
The EI Commission will soon begin the formal process of setting the EI premium rate for 2009. In doing so, the EI Commission will take into account the Chief Actuary's report, the principle that the premium rate should generate just enough revenue to cover the expected payments to be made during 2009 and any public input. A decision on the rate will be taken by the EI Commission on or before November 14, 2008 and confirmed by the government by November 30th.
The report can be viewed in its entirety at www.hrsdc.gc.ca/en/employment/ei/premium_rate/2009/index.shtml.
By Yosie Saint-Cyr, LL.B., Managing Editor at HRinfodesk.com
Published on HRinfodesk---Canadian Payroll and Employment Law News and Developments
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