Home Workplace Legislation/Press Releases Employment Insurance Commission announces 2024 premium rates, reveals forecasted deficit

Employment Insurance Commission announces 2024 premium rates, reveals forecasted deficit

by HR Law Canada

The Canada Employment Insurance Commission has unveiled the 2024 premium rates for Employment Insurance (EI), with modest increases for both employees and employers. According to an actuarial report released by the commission today, the employee rate will be set at $1.66 per $100 of insurable earnings, up from $1.63 in 2023. Employers will be paying $2.32 per $100, an increase from last year’s rate of $2.28.

The commission is mandated to establish the annual premium rate based on a seven-year break-even forecast by the EI Senior Actuary. The objective is to generate sufficient premium revenue to balance the EI Operating Account over the next seven years, accounting for any accumulated surplus or deficit.

The report indicates a forecasted cumulative deficit of $18.8 billion in the EI Operating Account by the end of 2024. This shortfall is largely a result of increased unemployment and temporary measures put in place during the COVID-19 pandemic. The new premium rate of $1.66 aims to bring the EI Operating Account close to a balanced state by 2030.

According to legislative guidelines, annual changes in the premium rate are capped at five cents. This year’s three-cent increase for employees and four-cent increase for employers stay within those bounds.

Residents of Quebec, who are covered under the province’s own Québec Parental Insurance Plan, will have separate rates. Employees will pay $1.32 per $100 of insurable earnings and employers will pay $1.85 per $100. The maximum annual contribution for a Quebec worker will go up by $53.19 to $834.24, and by $74.47 for employers to $1,167.94 per employee.

Additionally, the maximum insurable earnings for 2024 have been set at $63,200, a climb from $61,500 in 2023. Consequently, the maximum annual EI contribution for a worker will increase by $46.67 to $1,049.12, and for employers by $65.34 to $1,468.77 per employee.

The commission also announced that its Premium Reduction Program, designed to offer premium cuts to employers that provide qualified wage-loss plans, will offer about $1.29 billion in reductions for 2024. The relief will be shared between registered employers and their employees.

The complete actuarial report and summary by the commission are publicly available online, as part of efforts to maintain transparency and accountability in the rate-setting process.

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