Two-year freeze on increases will end on Jan. 1 and rates could rise by 15 cents per $100 of earnings.
Ottawa (10 Sept. 2010) - The Harper Conservatives plan to raise the premiums Canadian workers pay for employment insurance (EI).
Finance Minister Jim Flaherty confirmed Thursday that an increase is likely only hours after news reports that a panel created by the Conservatives will recommend an increase of 15 cents per $100 of earnings (8.7% from the current rate of 1.73%) when the current two-year freeze on rate increases ends on Jan. 1.
"EI premiums were frozen as part of the Economic Action Plan," Flaherty told reporters. "They were frozen as a measure to help Canada come out of recession."
Now that the economy and jobs picture has improved, the government has no plans to continue the freeze for the coming fiscal year, he added. "The situation with EI would remit to the normal situation and the freeze would end."
Objection from McGuinty
Meanwhile, Ontario Premier Dalton McGuinty says the move to raise rates is premature, given the state of the economy in Canada. He also argues that it is a "mistake" for Ottawa to be cancelling an extra five weeks of employment insurance benefits.
As of Saturday, Ottawa will end the extra weeks of regular benefits and stop providing up to 20 extra weeks for longer-serving employees.
Last year, the federal government enhanced EI benefits for laid-off workers in response to massive job cuts during the economic downturn.
Five weeks of benefits equals $1,768 on average and 20 weeks works out to an average of $7,072.
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE