EI premium increase could hurt jobs

Canadians will take a hit on their paycheques once the freeze on hikes to Employment Insurance rates ends on January 1, 2011 and.

A panel tasked with balancing the Canadian EI fund is recommending raising premiums by the maximum allowable amount in 2011, but critics are saying that could have a negative effect on the fragile Canadian job market. The EI fund is currently in the red, and starting in January the panel wants to begin skimming $1.83 off of every $100 earned, 15 cents more than the current rate. Employers would also have to pitch in an extra 21 cents per $100, and some analysts say this could prevent the creation of new jobs. The panel’s recommendations are non-binding, and can be overruled by the cabinet.