Employment Insurance Whipsaw
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Employment Insurance Whipsaw
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Projection to 2020 sees a return to excessive EI rates and surpluses
Canada’s Employment Insurance system, always a few steps behind reality, is about to send premium-paying employees and employers for a rollercoaster ride. The recent recession has certainly significantly affected employment markets and sent the unemployment rate from 5.8 per cent to 8.6 per cent in less than two years. However, interim policy decisions and the EI system’s own rate-setting mechanism will contribute to wildly fluctuating premiums in the decade ahead.
Based on historical Public Accounts data, current Department of Finance estimates and assumptions of gradually improving economic conditions, CFIB projects EI revenues and expenditures up to the year 2020 — five years past the government’s own projections. What we find is a period of rapidly escalating premiums, followed by a period of rapidly escalating EI account surpluses.
