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2. Employment Insurance >
3. Annual Reports

3) Actuarial Framework

The mechanism for establishing the premium rate, as established by the Act, has some unique characteristics which will be used as benchmarks in the calculation of the break-even rate performed by the chief actuary. These characteristics are described as follows:

• a) Forward-looking basis and the Employment Insurance Account
  In accordance with section 65.3 of the Act, the chief actuary shall determine annually the premium rate for a given year that should generate just enough premium revenue during that year to cover the payments that will be made under subsection 77(1) of the Act.

  This method is forward-looking and any annual or cumulative surplus, deficit or any notional interest credited to the EI Account does not enter into the calculation of the break-even premium rate.

• b) Anticipated modifications
  In accordance with section 65.3(2) of the Act, at the request of the Minister, the chief actuary must take into account changes, announced on or before October 14, that would affect the calculation of the break-even rate.

  On September 5, 2008, the Minister announced the continuation, with modifications, of the EI Pilot Projects and Transitional Measures. Please refer to appendices III and IV for further details.

• c) Minister of Finance assumptions
  In accordance with section 66.2 of the Act the Minister of Finance shall, on or before September 30 of each year, provide to the chief actuary and the Commission the most current forecast values of the economic variables that are relevant to calculate the premium rate for the following year. The assumptions are provided by the Minister of Finance, on or before September 30 of each year.

  In accordance with the Act, these assumptions must be used in the calculation of the break-even rate. The description of these assumptions can be found in Appendix III of the present report.

  However, there are a number of other assumptions, besides those provided by the Minister of Finance, that must be used and these will be the basis of actuarial estimates in the present document. These assumptions are also described in Appendix III.

• d) The Commission and the chief actuary
  In accordance with section 28 (1.1) of the Department of Human Resources and Skills Development Act, the chief actuary shall be under the direction of the Commission in the premium rate setting process.
  
  

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Date Modified:

2011-09-30