In a recent budget, Finance Minister Chrystia Freeland promised that Employment Insurance (EI) premiums would remain “holding steady”, but it has now been announced that premiums are set to rise by $1.4 billion dollars. This contradicts the Minister’s earlier statement and raises questions about the government’s commitment to helping Canadians during these challenging times.
According to an article by Blacklock’s Reporter, Freeland expressed concern for those affected by rising prices and the desire for inflation to decrease. She pledged to put “more money in Canadians’ pockets after a hard day’s work.” However, the Employment Insurance Commission recently announced a premium increase to address an $18.8 billion pandemic deficit in the EI fund.
The premium increase will see rates rise from $1.63 per $100 of wages for employees to $1.66, with employers also facing higher premiums. This hike is necessary to generate enough revenue to cover EI expenses over the next seven years and eliminate any cumulative surplus or deficit in the EI operating account.
Ironically, Minister Freeland’s budget document titled “A Made In Canada Plan” had stated that the “continued strength in the labour market” would boost EI revenues without requiring premium increases. Budget documents even included a table indicating that rates would be “holding steady at $1.63” through 2030. However, a briefing note from the Department of Employment revealed that Freeland was aware of the need for higher premiums weeks before her assurance that they would remain unchanged.
The briefing note stated that premium rates were expected to continue to increase in 2024 to reach a break-even rate that would pay down the costs of the current deficit in the EI Operating Account. The costs stemming from COVID-19 temporary measures total approximately $23.2 billion.
This increase in premiums comes after two years of frozen rates as part of COVID-19 relief measures. However, premiums were raised last September from $1.58 per hundred dollars of insurable earnings to $1.63.
This news raises concerns about the government’s transparency and commitment to helping Canadians. It suggests that promises made in budgets may not always be upheld, leaving citizens unsure about the reliability of the government’s financial plans.
As the economy continues to recover from the impacts of the pandemic, it is crucial for the government to manage finances responsibly and ensure that support programs, such as EI, remain accessible and affordable for those who need them. Canadians will be watching closely to see how the government addresses these concerns and whether they can restore trust in their economic policies.
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