GATINEAU, QC, Sept. 13, 2019 /CNW/ - The Canada Employment Insurance Commission (CEIC) today announced that the 2020 Employment Insurance (EI) premium rate will be $1.58 per $100 of insurable earnings – a decrease of 4 cents for employees compared to the 2019 rate, and a decrease of 6 cents to $2.21 for employers who pay 1.4 times the employee rate.
Each year on or before September 14, the CEIC is responsible for setting the annual 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, as forecast by the EI Senior Actuary. The Senior Actuary's report on the EI premium rate and the CEIC's summary of that report are available online to ensure continued transparency and accountability in the rate-setting process.
The CEIC also announced that the Maximum Insurable Earnings (MIE) for 2020 will increase to $54,200 from $53,100 in 2019. The MIE 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 maximum annual EI contribution for a worker will decrease by $3.86 to $856.36 (down $5.41 for employers to $1,198.90 per employee).
Furthermore, the Premium Reduction Program (PRP) will provide roughly $1.049 billion in premium relief in 2020 to registered employers and their employees, shared 7/12 and 5/12 respectively, in recognition of savings generated to the EI program by employer registered short-term wage-loss plans.
Finally, for self-employed Canadians who have opted-in to the EI program, the annual earnings required in 2019 will increase to $7,279 for claims filed in 2020. The level of earnings required by self-employed Canadians to be eligible for EI special benefits is indexed annually to growth in the MIE.
The premium rate in 2020 for residents of Quebec covered under the Quebec Parental Insurance Plan (QPIP) will be $1.20 per $100 of insurable earnings, while their employers will pay $1.68 per $100 of insurable earnings. The maximum annual contribution for a worker in Quebec will decrease by $13.35 to $650.40 (down $18.69 for employers to $910.56 per employee). EI premium rates are different for residents of Quebec, because the province of Quebec administers its own parental insurance plan, which is financed by Quebec workers and their employers.
Canada Employment Insurance Commission (EI Commission)
The 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. Among its other responsibilities, 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 ESDC 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
For further information: Media Relations Office, Employment and Social Development Canada, 819-994-5559, [email protected]