The Canada Employment Insurance Financing Board (CEIFB) published its employment insurance (EI) premium rate report, which includes the 2012 rates and forecasts the cumulative deficit for the EI operating account.
The CEIFB board of directors has set the 2012 EI premium rate for residents of all provinces, with the exception of Quebec, at $1.83 per $100 of insurable earnings. The EI premium rate for Quebec residents is set at $1.47.
The 2012 break-even rate for residents of all provinces with the exception of Quebec is forecast to be $2.56 per $100 of insurable earnings. After applying the premium reduction for residents of a province with a provincial parental leave plan, the break-even rate for Quebec residents is forecast to be $2.20 per $100 of insurable earnings, according to the CEIFB chief actuary.
For the first time since its establishment, the EI operating account is expected to break even on an annual basis in 2012. This would maintain the cumulative deficit at $8.8 billion as at Dec. 31, 2012.
"Again this year, Canadians have full disclosure of the financial position of the EI Operating Account and access to information that describes the decision-making process for the EI premium rate,” said David Brown, chair of the CEIFB. “The CEIFB Chief Actuary Report also made available on our website today provides further details on the methodology and calculations. Moreover, the CEIFB expects the deficit in the EI Operating Account to be stabilized for 2012 at approximately the same level that is currently forecast for its position at the end of December 2011."
The board of directors of the CEIFB is required to set the premium rate based on a detailed analysis of the break-even rate provided by the chief actuary and in accordance with certain legislated limits on the annual maximum increase or decrease in EI premium rates. Recently the federal government used its authority under the CEIFB Act to amend the annual maximum increase in EI premium rate.
On Nov. 8, the Government announced that it would limit the increase of the EI premium rate to five cents per $100 of insurable earning in 2012.
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