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Appendix I - Maximum Yearly Insurable Earnings

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As the maximum was set at $41,100 in 2008 in accordance with Section 4 of the Act (see Appendix V) the maximum will be indexed at the pace of the average weekly earnings.

The first step to produce that calculated value is to multiply the maximum from the preceding year, before rounding down, by the ratio of the average weekly earnings for the twelve month period ending in June of the preceding year to the corresponding average for the second preceding year.

Then the result is rounded down to the nearest one hundred dollars. Once this value surpasses $39,000, as it occurred in 2007, it will be used as the maximum insurable earnings.

Determination of the Maximum Insurable Earnings for 2009

The following figures provide the elements for the calculation of the maximum insurable earnings for 2009. The average weekly earnings is extracted from the time series 281-0026, as published by Statistics Canada under the authority of the Statistics Act, and represents the average weekly earnings for Canada, unadjusted for seasonal variation, for all industries and including overtime.

2009 - Maximum Annual Insurable Earnings’s Calculation
Description Formula Amount
Average annual weekly earnings for 2008 before rounding (A) $41,143.87
Average weekly earnings for the twelve month period ending on June 30, 2007 (B) $758.53
Average weekly earnings for the twelve month period ending on June 30, 2008 (C) $781.58
Annual rate of increase of average weekly earnings between June 30, 2007 and June 30, 2008 [ (C) - (B) ] ÷ (B) = (D) 3.04 %
Projected average annual weekly earnings for 2009 ((A) × [ 1 + (D) ] = (E) $42,394.37
Projected average annual weekly earnings for 2009 rounded down to nearest multiple of $100 Rounded down (E) = (F) $42,300.00
Annual Maximum Insurable Earnings for 2009 - $42,300.00

In 2007, and for the first time since 1996, the annual maximum insurable earnings exceeded the threshold of $39,000 established by the Act. In accordance with the indexation formula of section 4 of the Act, which is based on the unrounded previous year average and weekly earnings growth, the annual maximum insurable earnings for 2009 shall therefore be set at $42,300 compared to $41,100 for 2008.

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Date Modified:
2011-09-30