Question Period Note: 2024 Employment Insurance (EI) Premium Rate

Why is the 2024 Employment Insurance (EI) premium rate increasing?

The Government is committed to ensuring that the EI Program is accessible, adequate, and affordable for employees and employers while remaining financially sustainable in the long-term.

The rate of $1.66 for 2024 remains at historically low levels and is based on forecasts and estimates (prepared by the EI Senior Actuary).

At most, employees and employers will pay $46.67 and $65.34 more in EI premiums in 2024 than 2023, respectively.

EI premium rates are lower for Quebec residents because of that province’s parental insurance plan. For 2024, employees will pay $1.32 and employers will pay $1.85.

Importantly, due largely to continued low unemployment rates, the projected EI Operating Account deficit is reducing well. Projections for the end of 2023 have decreased from $25.2B a year ago to $20.2B now.

Premium Rates

Premium rates are set according to a seven-year forecast break-even rate that will result in a balance of $0 in the EI Operating Account at the end of that seven-year period. The forecast amount of EI benefits to be paid over the next seven years will determine the total amount of EI premiums that need to be collected from employees and employers. The EI Senior Actuary calculates the EI premium rate using economic projections, including forecast unemployment rates and growth in earnings.

On September 14, 2023, the Canada Employment Insurance Commission set the 2024 premium rate at $1.66 per $100 of insurable earnings. The employer rate is $2.324, or 1.4 times the employee rate.

EI premium rates are lower for Quebec residents because the province administers its own parental insurance plan, known as the Quebec Parental Insurance Plan (QPIP). The 2024 premium reduction is 34 cents, with premium rates for employees in Quebec is set at $1.32 per $100 of insurable earnings.

The 2024 Actuarial Report on the EI Premium Rate and its summary are available online as of September 14, 2023. They will be tabled in Parliament on September 30, 2023.

Premiums Payable

Maximum Insurable Earnings (MIE) for 2024 will be $63,200, an increase of $1,700 from the 2023 MIE. Based on the MIE and premium rate, the maximum 2024 premiums paid by workers will be $1,049.12 (up $46.67 from 2023), while employers will pay a maximum of $1,468.77 per employee (up $65.34 from 2023). The increased MIE for 2024 will also result in a higher maximum weekly benefit of $668 in 2024 (up $18 from 2023). Employers and their employees registered in qualified wage-loss plans under the Premium Reduction Program (PRP) are estimated to receive $1.290B in premium savings for 2024.

EI Operating Account

The 2024 Actuarial Report indicates that the cumulative deficit of the EI Operating Account on December 31, 2023, originally projected to be $25.21B in the 2023 Actuarial Report, has been revised down to $20.24B. This deficit is projected to decrease to approximately $18.78B as of December 31, 2024.

“The Canada Employment Insurance Commission plays a critical role in Canada’s employment insurance system and is responsible for setting the annual EI premium rate based on the seven-year break-even rate forecasted by the EI Senior Actuary. This work protects the functionality of one of the most important pieces of Canada’s social safety net.

Today, the Commission has announced that the EI premium rate for 2024 will be $1.66 per $100 of insurable earnings—an increase of 3 cents from the current rate. This EI premium rate will be 22 cents lower than it was between 2013 and 2016 ($1.88). This reflects the continued strength in Canada’s labour market and is in keeping with the Government’s work to ensure that the EI Operating Account is on track to balance over the course of its mandated seven-year break-even horizon.

The Government of Canada will always support the long-term sustainability of employment insurance and ensure that the program continues to address the needs of employers, workers and their families.”

Statement by Minister of Employment, Workforce Development and Official Languages Randy Boissonnault regarding the 2024 EI premium rate - Canada.ca