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Ottawa, November 30, 2001
2001-111
Employment Insurance Premium Cuts: Rate Set at $2.20 for 2002
Related document:
Employment Insurance (EI) premiums will be reduced by 5 cents to $2.20 in 2002, Finance Minister Paul Martin and Human Resources Development Minister Jane Stewart announced today.
"This reduction will put $400 million in the pockets of workers and businesses next year," said Minister Martin.
This is the eighth consecutive time EI premiums have been lowered since 1994, when they were $3.07 per $100 of earnings. In total, employers and employees will save $6.8 billion in 2002 compared to the 1994 rate.
"The EI program is responding to the needs of Canadians," said Minister Stewart. "This reduction in premiums, along with recent changes such as enhancing parental benefits, making small weeks a permanent national feature and repealing the intensity rule, make the program even more responsive."
The rate reduction is based on a joint recommendation to Cabinet by the Minister of Human Resources Development Canada and the Minister of Finance, and is consistent with the planning assumption used in Budget 2000 and the October 2000 Economic Statement and Budget Update.
Maximum insurable earnings will remain at $39,000 for 2002.
__________________
For further information:
| Jean-Michel Catta Public Affairs and Operations Division Department of Finance Canada (613) 996-8080 |
Melanie Gruer |
| Ghyslain Charron Media Relations Human Resources Development Canada (819) 994-5559 |
Beth Clarkson |
Impact of Changes to the EI Premium Rate and Maximum Insurable Earnings – 1994 to 2002
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Maximum Annual Insurable Earnings |
Premium Rate Per $100 of Insurable Earnings |
Annual Maximum Contribution |
Change in Annual Maximum Contribution |
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|---|---|---|---|---|---|---|---|
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|
EE* |
ER* |
EE |
ER |
EE |
ER |
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|
1994 |
$40,560 |
3.07 |
4.30 |
$1,245 |
$1,743 |
** |
|
|
1995 |
$42,380 |
3.00 |
4.20 |
$1,271 |
$1,780 |
+ $26 |
+ $37 |
|
1996 |
$39,000 |
2.95 |
4.13 |
$1,151 |
$1,611 |
- $121 |
- $169 |
|
1997 |
$39,000 |
2.90 |
4.06 |
$1,131 |
$1,583 |
- $20 |
- $27 |
|
1998 |
$39,000 |
2.70 |
3.78 |
$1,053 |
$1,474 |
- $78 |
- $109 |
|
1999 |
$39,000 |
2.55 |
3.57 |
$995 |
$1,392 |
- $59 |
- $82 |
|
2000 |
$39,000 |
2.40 |
3.36 |
$936 |
$1,310 |
- $59 |
- $82 |
|
2001 |
$39,000 |
2.25 |
3.15 |
$878 |
$1,229 |
- $59 |
- $82 |
|
2002 |
$39,000 |
2.20 |
3.08 |
$858 |
$1,201 |
- $20 |
- $28 |
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Cumulative change in maximum contribution since 1994 |
- $387 |
- $542 |
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* EE – employee contributions; ER – employer contributions (1.4 times the employee rate)
** This column measures yearly changes since 1994. Numbers are rounded.
Note: Employer contributions do not include the impact of the New Hires Program for small businesses. In 1997, the first year of the New Hires Program, eligible firms could receive a 100-per-cent premium refund of up to $10,000 on any increase in premiums above $250 compared to what they paid in 1996; in 1998 the refund rate was 25 per cent.
Employer contributions can also be reduced under the Federal Youth Hires Program for 1999 and 2000. All employers will receive a full refund of the premiums due on any increase in their youth payroll, for youth aged 18 to 24.
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| Last Updated: 2002-11-26 |
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