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Executive Summary

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

• the principle that the premium rate should generate just enough premium revenue to cover payments to be made for that year;
  
  
• the report from the employment insurance chief actuary; and
  
  
• any public input.
  
  

However, 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%.

In accordance with section 65.3 of the Act, it is my opinion that 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.

In addition, in accordance with the indexation formula of section 4 of the Act, the annual maximum insurable earnings for 2009 shall therefore be set at $42,300 compared to $41,100 for 2008 (for more details please consult Appendix I).

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Date Modified:

2011-09-30