EI Forecast

Out of curiosity I looked into if there are forecasts for EI rates for the next few years and the results are not exactly encouraging.  First there was this recent forecast which projected the maximum increase ($0.15/year) until 2015, which actually tracks fairly closely to this older but more detailed forecast (see chart 2 on page 3).

Overall the  numbers will looks something like this (rate per $100 of earnings):

  • 2010/11 – $1.73
  • 2011/12 – $1.88
  • 2012/13 – $2.03
  • 2013/14 – $2.18
  • 2014/15 – $2.33

So we are looking roughly at a 35% increase over the next four years and this according to our government is not a tax but rather a premium increase.  Which since it looks like my total EI deduction will easily be in excess of $1000/year when the current maximum is just under $750 doesn’t provide much comfort for me.  For employers, by the way, the matching rate is just 1.4 times the above numbers.

Overall expect to pay more for EI for many years to come.  The only good news in the longer term is if unemployment goes down we should see those premiums come back down by 2017 or so.  So at least I should see some lower rates before I plan to retire in 2023, I hope at least.

4 thoughts on “EI Forecast”

  1. On the other side of the ledger (the retirement side)…its nice not to be paying that premium anymore. An example of why one does not need as much income after retirement.

  2. CM,

    Very true. Not having to pay CPP, EI and lower tax bill really helps to make your retirement dollar go further.

    Tim

  3. It would be nice if you could opt out once you no longer need the plan. I don’t plan to retire at 45, but I’d like work to be optional by then. I suppose I could go self-employed at that point and stop paying it.

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