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8) Sensitivity of Projections

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In this section we will review variations in the assumptions that can have a significant effect on the EI break-even rate or EI Account revenues.

2009 - Sensitivity of Results in Relation to the Assumptions
2009 Assump-
tion used		 New assump-
tion -1.0 %		 New assump-
tion - Impact on break-even rate
 New assump-
tion +1.0 %		 New assump-
tion - Impact on break-even rate
Unem-ployment rate 6.5% 5.5% - 0.14 %2 7.5% + 0.14 %2
B/U ratio 46.79% 45.79% - 0.02 %2 47.79% + 0.02 %2
2009 - Sensitivity of Results in Relation to the Assumptions (continuity)
2009 Result New assump-
tion -1.0%		 New assump-
tion - Impact on revenues		 New assump-
tion +1.0%		 New assump-
tion - Impact on revenues
Break-even rate 1.73% 1.72% - $ 111 M 1.74% + $ 111 M

A. Unemployment rate variation

A variation of one percentage point in the unemployment rate, without varying any other assumptions, could impact the 2009 EI break-even rate in the following way :

  • I. A reduction in the unemployment rate of one percentage point would result in a decrease of the break-even rate for 2009 from 1.73% to 1.59%, or a 0.14% reduction; and

  • II. An increase in the unemployment rate of one percentage point would result in an increase of the break-even rate from 1.73% to 1.87%, or a 0.14% increase.

B. Beneficiaries to unemployed ratio (b/u) variation

If we were to increase or decrease the b/u ratio by one percentage point it would have the following impact on the EI break-even rate for 2009 :

  • A reduction in the b/u ratio of one percentage point would result in a decrease of the break-even rate from 1.73% to 1.71%, or a 0.02% reduction; and

  • An increase in the b/u ratio of one percentage point would result in an increase of the break-even rate from 1.73% to 1.75%, or a 0.02% increase.

C. Base break-even rate variation

If we were to increase or reduce the EI break-even premium rate for 2009 by 1 one-hundredth of a percentage point, for example a break-even rate of 1.74% or 1.72% instead of 1.73%, this would have the effect of increasing or decreasing, respectively, the amount of revenues to the EI Account by roughly $111 million.

2 The impact on the Employment Insurance premium rate for provinces with a PP would be identical.

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Date Modified:
2011-09-30