Employment Minister Randy Boissonnault has approved a pre-election reduction in Employment Insurance (EI) premiums for 2025, marking a small but significant decrease in the nation’s most essential income support program.Blacklock's Reporter says the Department of Employment announced that the Employment Insurance premium rate for 2025 will be reduced to $1.64 per $100 of insurable earnings, down two cents from the 2024 rate. Employers will continue to pay 1.4 times the premium rate charged to workers. The announcement came under the Employment Insurance Act.According to a Summary of the 2025 Actuarial Report, the cut is attributed to “an increase in earnings from an increase in the number of workers” and “lower expected costs,” though no further details were provided.A previous actuarial report had estimated that premiums would need to rise to $1.74 to break even on payouts. However, a December 2023 Briefing Binder from the Department of Employment acknowledged that further premium hikes could be poorly timed. “Future improvements to the Employment Insurance program will require additional premium rate increases at a time when many economists are predicting a recession,” the document stated.It suggested alternative measures might be necessary to support the financial sustainability of the EI Operating Account.Boissonnault had previously discussed the delicate balance between maintaining a robust system and avoiding burdensome increases. During testimony before the Commons human resources committee on May 6, he said, “We want to have a robust system, especially if we see there could be a recession or a slowdown in the economy.”Despite potential challenges, Boissonnault maintained that Employment Insurance remains “the most important income support program” in Canada. “Every year it supports around two million Canadians,” he said, underlining its essential role in the employment landscape.The two-cent rate cut for 2025 follows a series of adjustments over recent years. In 2023, the rate increased from $1.58 to $1.63 per $100 of insurable earnings, followed by another rise to $1.66 in 2024. These changes occurred after the government froze premiums for two years as part of its pandemic relief measures.Although current EI premiums are at what the Department of Employment describes as a “historic low,” concerns remain over the long-term sustainability of the system. The Briefing Binder warned that none of the current projections account for the costs of future program modernization efforts.Rates have fluctuated in the past, reaching as high as $1.88 in 2015. The 2025 premium of $1.64 is designed to balance the EI Operating Account within seven years, according to the department’s notice.
Employment Minister Randy Boissonnault has approved a pre-election reduction in Employment Insurance (EI) premiums for 2025, marking a small but significant decrease in the nation’s most essential income support program.Blacklock's Reporter says the Department of Employment announced that the Employment Insurance premium rate for 2025 will be reduced to $1.64 per $100 of insurable earnings, down two cents from the 2024 rate. Employers will continue to pay 1.4 times the premium rate charged to workers. The announcement came under the Employment Insurance Act.According to a Summary of the 2025 Actuarial Report, the cut is attributed to “an increase in earnings from an increase in the number of workers” and “lower expected costs,” though no further details were provided.A previous actuarial report had estimated that premiums would need to rise to $1.74 to break even on payouts. However, a December 2023 Briefing Binder from the Department of Employment acknowledged that further premium hikes could be poorly timed. “Future improvements to the Employment Insurance program will require additional premium rate increases at a time when many economists are predicting a recession,” the document stated.It suggested alternative measures might be necessary to support the financial sustainability of the EI Operating Account.Boissonnault had previously discussed the delicate balance between maintaining a robust system and avoiding burdensome increases. During testimony before the Commons human resources committee on May 6, he said, “We want to have a robust system, especially if we see there could be a recession or a slowdown in the economy.”Despite potential challenges, Boissonnault maintained that Employment Insurance remains “the most important income support program” in Canada. “Every year it supports around two million Canadians,” he said, underlining its essential role in the employment landscape.The two-cent rate cut for 2025 follows a series of adjustments over recent years. In 2023, the rate increased from $1.58 to $1.63 per $100 of insurable earnings, followed by another rise to $1.66 in 2024. These changes occurred after the government froze premiums for two years as part of its pandemic relief measures.Although current EI premiums are at what the Department of Employment describes as a “historic low,” concerns remain over the long-term sustainability of the system. The Briefing Binder warned that none of the current projections account for the costs of future program modernization efforts.Rates have fluctuated in the past, reaching as high as $1.88 in 2015. The 2025 premium of $1.64 is designed to balance the EI Operating Account within seven years, according to the department’s notice.
