The Department of Employment is cautious about increasing Employment Insurance (EI) premiums as part of the program's promised “modernization,” as mentioned in a briefing note. . EI Modernization .Employers pay a maximum of $1,400 per year in premiums, while workers pay up to $1,000..“Given the current and near-term inflationary pressures, the government is taking a cautious approach to putting in place new Employment Insurance measures that could increase EI premiums and make it harder for workers and employers to make ends meet,” said the April 18 note EI Modernization. It did not elaborate..According to Blacklock’s Reporter, in a 2021 Ministerial Mandate letter, the cabinet promised to “modernize the Employment Insurance system for the 21st century, building a stronger and more inclusive system that covers all workers.” Business and labour groups have not agreed on reforms..“Worker groups continued to express the need to prioritize increasing access to Employment Insurance and noted benefits are currently not adequate for meeting the needs of recipients, in particular for lower-income workers,” the employment department wrote last Sept. 29 in a report: Modernizing Canada’s Employment Insurance Program: Consultations. .“Employers cautioned there should not be additional financial burden on businesses in particular during the pandemic recovery period.”.Employers have petitioned the cabinet to rewrite the funding formula that currently sees companies pay 1.4 times their employees’ premiums. Costs should be “split 50-50 between employers and employees,” the Canadian Federation of Independent Business wrote in a 2021 report Focusing on Fairness: Small Business Perspective on Reforming the EI System..Unions want to increase the benefits that people receive under the Employment Insurance Act. .Currently, the benefits are set at 55% of a person's average weekly earnings. .Businesses are against this increase because they believe it will be expensive..“Many participants voiced concerns that Employment Insurance benefits are inadequate,” said Consultations. .“They expressed that the current replacement rate is at an historical low and provides insufficient weekly benefit amounts for low and middle-income unemployment individuals. Labour groups and some academics commonly suggested to increase the replacement rate to 67% or 75%.”.“Employers cautioned increasing and varying the replacement rate would increase program costs which could result in higher premiums for employers and employees,” said Consultations. No deadline has been fixed for any amendments to the Act..The program started in 1940 with the Unemployment Insurance Act. .It was created to provide benefits to people who lost their jobs involuntarily. .At that time, the maximum amount of benefits was $18 per week, equivalent to $320 in today's money. .In 1996, Parliament changed the program's name to the Employment Act.
