Summary of the 2025 Actuarial Report on the Employment Insurance Premium Rate
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List of abbreviations
- EI
- Employment Insurance
- ESD
- Employment and Social Development
- ESDC
- Employment and Social Development Canada
- MIE
- Maximum Insurable Earnings
- OSFI
- Office of the Superintendent of Financial Institutions
- PRP
- Premium Reduction Program
- QPIP
- Quebec Parental Insurance Plan
- SBPR
- Small Business Premium Rebate
- WLP
- Wage-loss Plans
The Canada Employment Insurance Commission
The Canada Employment Insurance Commission (the Commission) presents its summary of the 2025 Actuarial Report on the Employment Insurance Premium Rate. This is one of the Commission's responsibilities as defined per section 66.31 of the Employment Insurance Act (the Act).
The Commission is responsible for administering the Act. The objective of the Act is to provide eligible workers with employment insurance (EI) benefits. The Act also provides eligible workers with employment programs and services.
The Commission is a tripartite organization that consists of 4 members, 3 of whom are voting members. They represent the interests of workers, employers, and the Government. The Governor in Council appoints the Commissioner for Workers and the Commissioner for Employers. Each Commissioner represents and reflects the views of their constituencies. The Deputy Minister of the Department of Employment and Social Development Canada (ESDC) is the Chairperson of the Commission. The Senior Associate Deputy Minister of the Department of ESDC and Service Canada's Chief Operating Officer is the Vice-Chairperson of the Commission. The Vice-Chairperson only votes when acting for the Chairperson.
The Commission's responsibilities include the day-to-day administration of the EI Operating Account. It delegates this responsibility to the officers and employees of the Department of ESDC.
The EI program's financial transactions are reported through the EI Operating Account. The Act establishes the EI Operating Account in the public accounts of Canada. Amounts received under the Act are deposited in the Consolidated Revenue Fund. The EI Operating Account is credited for these amounts. The benefits and the costs of administration of the Act are paid out of the Consolidated Revenue Fund. The EI Operating Account is charged for these amounts.
Premium rate setting
Since April 1, 2016, the Commission sets the EI premium rate every year. The Commission engages the services of a Fellow of the Canadian Institute of Actuaries to perform actuarial forecasts and estimates. This person is also an employee of the Office of the Superintendent of Financial Institutions (OSFI). On February 3, 2022, OSFI appointed Mathieu Désy as the Commission's Senior Actuary, EI Premium Rate Setting (Senior Actuary).
The premium rate is set according to a 7-year forecast break-even rate. The Senior Actuary forecasts this break-even rate in an actuarial report. The break-even rate is the premium rate that would result in an EI Operating Account balance of $0 in 7 years. This means that the break-even rate also eliminates any cumulative surplus or deficit after this period. Annual changes to the premium rate are subject to a legislated limit of 5 cents. Provided it is in the public interest, the Governor in Council may change this limit or substitute a premium rate for the following year that is different from the one set by the Commission. These measures ensure stable and predictable premium rates for employees and employers. It also ensures that EI contributions are only used for EI purposes.
The Commission publishes the Maximum Insurable Earnings (MIE) each year. Employees and employers pay EI premiums up to this threshold.
The Act includes regulations for providing premium reductions to provinces and employers that deliver plans that reduce or replace EI special benefits. The Commission determines premium reductions for employees and employers in Quebec. These premium reductions account for the Quebec Parental Insurance Plan (QPIP). The QPIP replaces EI maternity and parental benefits for Quebec residents. The Commission also determines premium reductions for employers who provide their employees with qualified wage-loss plans. This includes short-term disability plans that reduce the demand on the EI program (for example, for sickness benefits). Employers register these plans under the Premium Reduction Program (PRP).
The Commission prepares a summary of the actuarial report. It also publishes the actuarial report and its summary on the day the premium rate is set. The Minister of Employment and Social Development (ESD) tables the actuarial report and summary in both Houses of Parliament. Tabling must occur within 10 sitting days of their publication. This ensures transparency and accountability in the annual EI premium rate setting process.
Recent Employment Insurance program changes
Over the last year, the following changes have been made to the EI program:
Seasonal claimants
Budget 2024 extended the current temporary seasonal worker measure for 2 years until October 2026. This measure provides 5 additional weeks of EI regular benefits, for a maximum of 45 weeks, to eligible seasonal workers in 13 targeted EI economic regions.
The 2023 Fall Economic Statement announced the introduction of a temporary measure from September 2023 to September 2024. This measure provides up to 4 more weeks (in addition to the 5 weeks outlined in the measure above) of EI regular benefits to eligible seasonal claimants in 13 targeted EI economic regions. The maximum of 45 weeks of EI regular benefits remains in place.
Benefits for parents through adoption or surrogacy
The 2023 Fall Economic Statement announced a 15-week shareable EI benefit for parents through adoption or surrogacy.
Training benefit
The Government has delayed the implementation of the following 2 components of the Canada Training Benefit:
- the EI Training Support Benefit, designed to help workers cover their living expenses when they require time off work to pursue training.
- the EI Premium Rebate for Small Businesses, designed to help offset EI premium increases resulting from the EI Training Support Benefit.
Other
Budget 2024 announced the migration over 5 years of Old Age Security and EI benefits to a secure, user-friendly platform, starting in fiscal year 2024 to 2025.
The additional funding for the Labour Market Development Agreements will not be extended beyond fiscal year 2023 to 2024.
2025 premium rate
The Senior Actuary has forecast the 7-year break-even rate for 2025 at $1.64 per $100 of insurable earnings. This is a decrease of 2 cents from the 2024 7-year forecast break-even rate of $1.66 per $100 of insurable earnings.
A combination of several factors contributes to this 2-cent decrease when compared to the 2024 actuarial projections. A higher than anticipated deficit as of December 31, 2023, a higher projected average unemployment rate between 2025 and 2031, and increased expenditures resulting from a higher average weekly benefit and increased administration costs creates upward pressure on the rate. However, it is more than offset by an increase in earnings from an increase in the number of workers, lower expected cost from measures and the change in the 7-year break-even period from 2024-2030 to 2025-2031.
The annual EI actuarial forecast rests on multiple assumptions. Some assumptions affect the 7-year forecast break-even rate more than others do. For example, a ±0.5% variation in the average unemployment rate over the 2025 to 2031 period would result in an increase or decrease of 7 cents in the 2025 7-year forecast break-even rate.
The 2025 EI premium rate is set at $1.64 per $100 of insurable earnings for workers ($2.30 for employers). The 2025 premium rate for Quebec residents is $1.31 per $100 of insurable earnings ($1.83 for employers). This reduction accounts for the province administering QPIP, its own parental insurance plan.
Employers pay 1.4 times the employee premium rate. For 2025, the premium rate for employers is $2.30 ($2.296 unrounded) per $100 of insurable earnings. For employers in Quebec, the premium rate for 2025 is $1.83 ($1.834 unrounded) per $100 of insurable earnings.
Variations in the premium rate affect the EI Operating Account's cumulative balance. A ± 1 cent variation over 2025 to 2031 would result in a $1.656 billion increase or decrease in the cumulative balance at the end of the 7-year forecast period.
Actuarial report: Main findings
This summary presents the results of the 2025 Actuarial Report on the EI premium rate. The report used actuarial forecasts and estimates to determine the EI premium rate and the MIE. It also calculated the premium reductions related to the QPIP and for employer wage-loss plans under the PRP.
7-year forecast break-even rate
The 7-year forecast break-even rate for 2025 is $1.64 per $100 of insurable earnings. This represents a decrease of 2 cents from the forecast 2024 rate of $1.66 per $100 of insurable earnings.
2025 premium rate
The EI premium rate for 2025 is $1.64 per $100 of insurable earnings for workers ($2.30 for employers).
Quebec Parental Insurance Plan premium reduction
The 2025 QPIP reduction is 33 cents. The premium rate for Quebec residents is $1.31 per $100 of insurable earnings ($1.83 for employers in Quebec).
Residents of a province that administers its own insurance plan can receive premium reductions. This plan must reduce or replace federal EI benefits. EI premium rates are lower for Quebec residents because the province administers its own parental insurance plan. Quebec workers and employers finance this plan.
Premium Reduction Program
Employers can receive premium reductions if they provide their employees with qualified wage-loss plans. These plans must meet certain requirements and reduce special benefits (for example, sickness benefits) payable.
There are approximately 25,200 employers registered in the PRP. This covers an estimated total amount of insurable earnings in 2025 of about $392 billion.
There are 4 categories of qualified plans. Each category has a rate of reduction that is determined each year. The calculations reflect each category's average rate of savings for EI. In 2025, reductions will provide registered employers and their employees with an estimated $1.365 billion in premium savings. Table 1 shows the premium reductions.
| Categories | Category 1 | Category 2 | Category 3 | Category 4 |
|---|---|---|---|---|
| Premium reduction (per $100 of insurable earnings) | $0.21 | $0.37 | $0.37 | $0.41 |
Maximum Insurable Earnings
Workers and employers pay EI premiums on insurable employment income. Those premiums are paid up to an income threshold, which is the MIE. This threshold also determines the maximum weekly benefit rate in a calendar year. The MIE for 2025 is $65,700. This is an increase from $63,200 in 2024.
Statistics Canada publishes average weekly earnings of the industrial aggregate in Canada. The MIE is indexed to the annual percentage increase in this value. This ensures that the level of insured income maintains its relative value.
Table 2 shows the maximum amounts of premiums payable by workers and employers (per employee) for 2025. It is based on the MIE and premium rates.
| Contributor | Premium rate (per $100 of insurable earnings) | Maximum annual contribution 2025 | Difference in maximum annual contribution from 2024 |
|---|---|---|---|
| Workers | $1.64 | $1,077.48 | $28.36 |
| Employers | $2.296 | $1,508.47 | $39.70 |
| Workers residing in Quebec | $1.31 | $860.67 | $26.43 |
| Employers in Quebec | $1.834 | $1,204.94 | $37.00 |
Self-employed workers
Self-employed workers can access special benefits. They must opt-in to the EI program and pay the employee premium rate. They do not pay the employer portion of EI premiums.
A self-employed worker who opts-in to the EI program may qualify for special benefits if they meet prescribed conditions. This includes having a minimum amount of self-employed earnings. For 2025, the minimum amount of self-employed earnings is $8,826.
The minimum level of self-employed earnings is indexed to the growth in the MIE. It is calculated each year. This ensures the minimum level of earnings retains its relative value over time.
Employment Insurance Operating Account projections
The Senior Actuary's report projects the EI Operating Account to show a cumulative deficit of $18.229 billion as of December 31, 2024. The cumulative deficit is expected to decrease to $15.839 billion as of December 31, 2025. This projection is based on the premium rates described above. Table 3 shows the forecast revenues and expenditures.
| Calendar year | Premium rate (%) | Employer premium per employee (%) | Revenues: Gross Premiums after Refunds | Revenues: Reduction for WLP* | Revenues: Reduction for Provincial Plans | Revenues: SBPR** | Revenues: Other Adj.*** | Net premiums | Expenditures | Annual surplus (deficit) | Cumulative surplus (deficit) 31 December |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 1.63% | 2.28% | 32,342 | (1,341) | (1,623) | - | (103) | 29,276 | 25,514 | 3,762 | (20,899) |
| 2024 | 1.66% | 2.32% | 33,971 | (1,320) | (1,543) | - | 14 | 31,122 | 28,452 | 2,671 | (18,229) |
| 2025 | 1.64% | 2.30% | 34,761 | (1,365) | (1,538) | (26) | - | 31,832 | 29,442 | 2,390 | (15,839) |
- * Wage-Loss Plans
- ** Small Business Premium Rebate
- *** Adjustments for the timing of premium assessment
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