Oakville Chamber cautions against Employment Insurance (EI) premium increase
By: Faye Lyons, Vice President of Government Relations & Advocacy
The Employment Insurance Program is a critical feature of Canada’s social safety net. It is intended to provide temporary financial support for individuals who lose their jobs while they look for work. The program has not had a comprehensive review in over two decades and it is important that the EI system is modernized and reflects the needs of today’s labour market and workforce.
To that end, the Chamber welcomes the federal government’s review of the program to ensure the services are resilient, accessible, adequate and financially sustainable. Businesses are still recovering post COVID and are facing a multitude of challenges including labour shortages, record inflation and supply chain disruptions. We caution government that now is not the time to achieve these goals by increasing EI premiums.
The EI Program was put through its paces during the pandemic and the extra-ordinary measures that were employed have come at a great cost. According to the 2022 Actuarial Report on the EI Premium Rate, COVID measures will lead the EI Operating Account to a projected cumulative deficit of $33.9 billion by the end of 2022.
The federal 2022 Budget suggests that rates could increase 15 cents (at 5 cent increments) over the next three years (2023-2025) to get back to balance.
The business community has endured COVID and the pandemic has had a profound impact on the ability of businesses to operate. Employers should not have to carry any additional government EI pandemic debt burden through increased premiums. We believe that economic recovery requires government programs and policies that focus on growth and sustainability.
As the government finalizes its consultations on reforming the EI program, consideration of the economic challenges that businesses and employers are facing today as a result of factors out of their control need to be recognized. Employers who pay 58% of EI should not be burdened with a premium increase.
On behalf of our Chamber members, we encourage the federal government to consider EI program solutions that do not rely solely on increased premiums.