Archived - Part 3 – Various Measures: Division 1

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Employment Insurance

Premium Rate Setting

On September 9, 2013, the Government announced it will freeze the Employment Insurance (EI) premium rate at the 2013 level of $1.88 per $100 of insurable earnings for 2014, and additionally that the rate will be set no higher than $1.88 for 2015 and 2016.

By doing this, the Government is promoting stability and predictability for employers and employees. It will also leave $660 million in the pockets of employers and workers in 2014.

To ensure further predictability and stability around EI premium rates, this measure will amend the Employment Insurance (EI) Act to set the EI premium rate for 2015 and 2016 at $1.88 per $100 of insurable earnings.

In addition, this measure will also establish that the premium rate for 2017 and onwards will be set according to the seven-year break-even rate setting mechanism. This will ensure that EI premiums are no higher than they need to be to pay for the EI program over that seven-year period.

Finally, this division repeals the Canada Employment Insurance Financing Board (CEIFB) Act and related provisions of other Acts to make permanent the dissolution of the CEIFB, the suspension of which was announced in Economic Action Plan 2012. Beginning with the 2017 premium rate, EI premium rates will be set by the Canada Employment Insurance Commission.

Hiring Credit for Small Business 2013

Small businesses are the engine of job creation in Canada. In recognition of the challenges faced by small businesses across the country, Budget 2011 announced a temporary Hiring Credit for Small Business of up to $1,000 per employer.

This credit provided needed relief to small businesses by helping defray the costs of hiring new workers and allowing them to take advantage of emerging economic opportunities. Indeed, the Hiring Credit was so successful that it was extended to 2012.

While the Canadian economy is improving, the global economy remains fragile. In order to support job creation, clause 135 will amend Part IV of the Employment Insurance Act to extend and expand the Hiring Credit for Small Business to 2013.

By doing this, an employer whose premiums were $15,000 (increased from $10,000 used in 2011 and 2012 Hiring Credit for Small Business) or less in 2012 will be refunded the increase in their 2013 premiums over those paid in 2012, to a maximum of $1,000.

It is estimated that 560,000 small businesses will benefit from this measure, saving them $225 million in 2013.

Employment Insurance (Fishing) Regulations

Effective since April 7, 2013, most EI claimants (excludes self-employed fishers and self-employed persons) have their weekly EI benefit rate calculated based on the highest weeks of insurable earnings during the qualifying period, generally 52 weeks. The number of weeks used for calculating the EI weekly benefit rate ranges from 14 to 22, depending on the monthly unemployment rate in a claimant’s EI economic region when the claim is established.

In order to align the EI (Fishing) Regulations with the new legislation, a series of regulatory changes were made in spring 2013. An error in the wording of these technical regulatory changes resulted in some unintended benefit reductions for regular EI claimants with fishing income.

To correct this error, the EI Fishing Regulations will be amended to allow all regular claimants with fishing income to have their gross fishing earnings over the qualifying period added to their regular employment income in their best weeks. This will correct the anomaly created by the wording of the earlier technical amendments. This will be applied retroactively to April 7, 2013.

The number of best weeks used to calculate the weekly benefit rate is still determined according to the regional unemployment rates as per the current national VBW legislation.

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