Common menu bar

• Français
• Home
• Contact Us
• Help
• Search
• canada.gc.ca

Breadcrumb

1. Home >
2. Employment Insurance >
3. Annual Reports

2) Legislative Framework

Sections 65.3 to 66.6 of the Act provide that, by November 14 of each year, the Canada Employment Insurance Commission (“the Commission”) shall set the premium rate taking into account three factors:

• a) that the setting of the premium rate, in accordance with the most current forecast values provided by the Minister of Finance in accordance with section 66.2 of the Act and taking into account any premium reductions regulations made in accordance with section 69 of the Act, should generate just enough premium revenue during that year to cover the payments that will be made in accordance with subsection 77(1) of the Act during that year, considering any announcements made by the Minister in accordance with subsection 65.3(2) of the Act;
  
  
• b) the report of the chief actuary; and
  
  
• c) any public input.
  
  

For presentation purposes, the present report will refer to the break-even rate in order to define the rate described in section a) above, as calculated at the time of the present report.

Section 68 of the Act sets the employer premium at 1.4 times the employee premium. However, subsection 69(1) of the Act provides for a premium reduction system for employers who have a registered wage-loss replacement plan for sickness. Employers who have a registered wage-loss replacement plan use a multiplier that is less than 1.4 and this is the subject of a separate report entitled “Report on Rates of Employment Insurance Premium Reduction for Registered Wage-Loss Replacement Plans”. Additionally, subsection 69(2) of the Act provides that the Commission can make regulations to provide a system for reducing the employer's and employee's premiums for Provincial Plans such as the Quebec Parental Insurance Plan. This latest reduction is dealt with in the current report and more specifically in Appendix II.

It is important to remember that the Act also establishes two benchmarks in relation to the new Employment Insurance premium rate mechanism :

• 1) From one year to the next, the premium rate may not be increased or decreased by more than fifteen one-hundredths of one per cent (0.15%); and
  
  
• 2) Subject to 1), on the joint recommendation of the Minister of Human Resources and Social Development and the Minister of Finance, the Governor in Council may substitute a premium rate different from the one set by the Commission if it considers it to be in the public interest.
  
  

The following is a list of the most important deadlines that must be fulfilled each year under the premium rate mechanism:

By September 30
According to section 66.2 of the Act, each year the Minister of Finance shall provide to the chief actuary and the Commission the most current forecast values of the economic variables that are relevant to the determination of the break-even premium rate.

By October 14

• According to subsection 65.3(1) of the Act, the mandate of the chief actuary is to determine the premium rate for the following year that should generate just enough premium revenue to cover the payments that will be made under subsection 77(1).
  
  
• According to subsection 65.3(2) of the Act, if the Minister has announced any changes to payments to be made under paragraph 77(1)(a), (b) or (c) for a year, the chief actuary shall, at the request of the Minister, take into account those changes in the determination of the break-even premium rate.
  
  
• According to subsection 65.3(3) of the Act the chief actuary shall provide to the Commission a report setting out the break-even premium rate for the following year and the Commission shall, as soon as possible after receiving the report, make it available to the public.
  
  

By November 14
According to subsection 66(1) of the Act the Commission shall set the premium rate for the following year based on three criteria:

• 1) The rate that should generate just enough premium revenue during that year to cover the payments;
  
  
• 2) the report of the chief actuary to the Commission for that year; and
  
  
• 3) any public input.
  
  

By November 30
In accordance with section 66.3 of the Act, on the joint recommendation of the Minister of Human Resources and Social Development and the Minister of Finance, the Governor in Council may substitute a premium rate different from the one set by the Employment Insurance Commission, if the Governor in Council considers it to be in the public interest.

Primary navigation (left column)

Date Modified:

2011-09-30