EI premiums to rise, business groups call on feds to step in and save the scheme

With employment insurance premiums set to rise in the new year, both employers and workers are calling on the federal government to step in and rescue the program from the considerable amount of debt it has fallen into since the COVID-19 pandemic.

The program, which is financed entirely through premiums paid by workers and employers, had accumulated $25.9 billion of debt by the end of 2021, according to the Office of the Chief Actuary.

The rise in debt comes after a staggering number of Canadians were unemployed during the pandemic and eligibility rules for the program were relaxed to ease access to jobless benefits.

Related Articles:

• Canadian companies turning to amenities to lure staff back to offices

• Canada to allow international students to work more hours due to labour shortage

As the Liberals work on a plan to modernize the EI program, economics professor Miles Corak at the City University of New York says the reform should include changes to how the program is financed.

In a note published by the C.D. Howe Institute earlier this week, Corak makes the case for tripartite funding of the program, where employers, workers, and the government contribute.

Corak suggests the federal government should cover increased costs to the program caused by unexpected economic shocks and collect any surpluses accumulated during times of low unemployment.