Greenhouse Canada

Ottawa freezes EI rate premiums

September 10, 2013  By Canadian Garden Centre & Nursery

Sept. 10, 2013, Ottawa — The federal government has announced a three-year freeze on employment insurance premium rates.

Rates will hold at the current level of $1.88 per $100 of insurable
earnings in 2014, and will be set no higher than this rate in 2015 and

"Our government is freezing EI rates and leaving $660
million in the pockets of job creators and Canadian workers in 2014
alone, which will help provide the certainty and flexibility employers,
especially small businesses, need to keep growing," said Jim Flaherty,
minister of finance. "This tax relief will help support Canada's
continued economic recovery and sustained, business-led, long-term


Falling unemployment in recent years means the federal
government's EI Operating Account is on track to return to balance. As a
result, the government has decided the premium rate increases it
previously projected are no longer necessary.

"As payroll taxes
like Employment Insurance are particularly challenging for small
business, today's announcement of an EI rate freeze is fantastic news
for Canada's entrepreneurs," said Dan Kelly, president and CEO of the
Canadian Federation of Independent Business. "As employers pay 60 per
cent of the cost of the EI system, small firms can use these savings to
hire, improve wages or help grow their businesses."

Beginning in
2017, the federal government will set the EI premium rate annually at a
seven-year break-even rate. This move is meant to ensure that EI
premiums are no higher than needed to pay for the EI program over that
seven-year period. The federal government believes this will result in
sustainable funding, affordable rates and ongoing predictability and
stability in the system.

CFIB is lobbying for a an EI rate reduction to go into effect beginning in 2016.

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