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Canada Employment Insurance Commission Announces 2019 Employment Insurance Premium Rate and Maximum Insurable Earnings

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Canada Employment Insurance Commission Announces 2019 Employment Insurance Premium Rate and Maximum Insurable Earnings

Canada NewsWire

GATINEAU, QC, Sept. 13, 2018 /CNW/ - The Canada Employment Insurance Commission (CEIC) announced today that the 2019 Employment Insurance (EI) premium rate will be $1.62 per $100 of insurable earnings—a decrease of 4 cents for employees compared to the 2018 rate and an effective decrease of 5.6 cents for employers, who pay 1.4 times the employee rate.

Each year, the CEIC sets the premium rate based on the seven-year break-even rate, which is a rate forecast to balance the EI Operating Account over a seven-year horizon, including the elimination of any cumulative surplus or deficit.

The reduction in the premium rate reflects lower than previously forecast unemployment projections over the seven-year period, thanks to the strength of the Canadian economy, and the reduction has more than offset the costs of recent improvements to the EI program. New EI measures, introduced in Budget 2018, will: provide an additional five weeks of EI benefits when both parents agree to share parental leave; allow those who work while on claim to keep a greater portion of their benefits; and improve EI service delivery.

The CEIC also took the opportunity to announce the following:

  • Premium rates for residents of Quebec covered under the Quebec Parental Insurance Plan (QPIP) will be reduced by 5 cents per $100 of insurable earnings, to a premium rate of $1.25 ($1.75 for employers). EI premium rates are lower for residents of Quebec, because the province of Quebec administers its own parental insurance plan, which is financed by Quebec workers and their employers.
  • The maximum insurable earnings for 2019 will increase to $53,100 from $51,700 in 2018. The maximum insurable earnings is indexed on an annual basis and represents the ceiling up to which EI premiums are collected and the maximum amount considered in applications for EI benefits.
  • The Premium Reduction Program will provide roughly $1 billion in premium relief in 2019 to registered employers and their employees in recognition of savings generated to the EI program by employer registered short-term wage-loss plans.
  • For self-employed Canadians who have opted in to the EI program, the annual earnings required in 2018 will increase to $7,121 for claims filed in 2019. The level of earnings required by self-employed Canadians to be eligible for EI special benefits is indexed annually to growth in the maximum insurable earnings.

In addition to these changes, the CEIC also made public today the EI premium rate setting reports. To ensure continued transparency and accountability in the rate setting process, the Senior Actuary's report on the EI premium rate and the CEIC's summary of that report are now available online.

Quick Facts

  • The maximum annual EI contribution for a worker will increase by $2.00 to $860.22 (up $2.80 for employers to $1,204.31 per employee). In Quebec, the maximum annual contribution for a worker will decrease by $8.35 to $663.75 (down $11.69 for employers to $929.25 per employee).
  • The 2019 premium rate of $1.62 per $100 of insurable earnings, down from $1.66 in 2018, represents a reduction of 26 cents from the 2016 rate of $1.88. Because of the strength of the Canadian economy, the government has been able to make enhancements to EI benefits and programs funded by the EI Operating Account, while reducing costs for individual Canadians and Canadian employers.

Associated Links

Budget 2018
2019 Actuarial Report on the Employment Insurance Premium Rate 
Summary of the Actuarial Report on the Employment Insurance Premium Rate 
Canada Employment Insurance Commission

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Backgrounder

Canada Employment Insurance Commission

The Canada Employment Insurance Commission (CEIC) is a tripartite organization, representing the interests of workers, employers and government. The Commissioner for Workers and the Commissioner for Employers are appointed by the Governor in Council for terms of up to five years. They are mandated to represent and reflect the views of their respective constituencies.

The CEIC plays a key role in overseeing the Employment Insurance (EI) program and is mandated with annually monitoring and assessing the EI program. The Commission is also responsible for ensuring financial transparency and rate setting for EI. Specifically, the CEIC:

  • commissions an annual report on the EI premium rate from the Senior Actuary and prepares a summary of that report;
  • delivers both reports to the ministers of Employment and Social Development (Minister Duclos) and Finance;
  • sets the annual EI premium rate; and
  • sets the annual maximum insurable earnings and premium reductions according to the legislative requirement.

 

SOURCE Employment and Social Development Canada

View original content: http://www.newswire.ca/en/releases/archive/September2018/13/c6851.html

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