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Canada Employment Insurance Commission sets EI premium rate for 2009

| www.cos-mag.com

As of January 1, 2009, the employee rate per $100 of insurable earnings will be $1.73, maintaining its current level. The corresponding employer rate is 1.4 times the employee rate.

The Maximum Insurable Earnings (MIE) will rise from $41,100 to $42,300 for 2009, according to the formula prescribed by the Employment Insurance Act and described in the Chief Actuary's Report. The MIE represents the ceiling up to which EI premiums are collected and therefore is also the maximum amount considered in an application for EI benefits.

For 2009, the maximum amount a worker earning the Maximum Insurable Earnings or more would contribute for that year would be $731.79 (an increase of $20.76 from 2008). The maximum amount an employer would contribute related to each employee earning the MIE or more would be $1024.51 (an increase of $29.07 from 2008). Because EI benefits replace 55 per cent of a claimant's average weekly insurable earnings, up to the Maximum Insurable Earnings, the maximum amount of EI benefits payable also increases to $447 per week from $435 in 2008.

The EI premium rate for Quebec will be $1.38 for employees and 1.4 times the employee rate for employers. Starting in January 2006, Quebec began offering its own parental benefits, resulting in savings for the EI program and giving rise to a rate that is different from that for the rest of Canada. This means that in Quebec, the maximum amount a worker earning the Maximum Insurable Earnings or more would contribute for that year would be $583.74 ( an increase of $12.45 from 2008), and the employer would contribute 1.4 times the employee's premiums to a maximum of $817.24 (an increase of $17.43 from 2008). With the increase in the MIE, the weekly EI benefits payable increases as in the rest of Canada.

In Budget 2008, the federal government implemented changes to the governance and management of the EI Account by creating the Canada Employment Insurance Financing Board (CEIFB). The CEIFB will be responsible for implementing a new EI premium rate-setting mechanism and setting the EI premium rate for 2010. 

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