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The federal government will freeze employment insurance (EI) premiums for the next two years, offering a break to businesses struggling through the Covid-19 pandemic.

The Canada Employment Insurance Commission (CEIC) said Monday that the EI premium rate will remain $1.58 per $100 of insurable earnings for 2021 and 2022. For employers, who pay 1.4 times the employee rate, the rate remains $2.21.

The commission sets the annual premium based on the seven-year break-even rate for the EI operating account, with higher unemployment projections contributing to higher rates.

Due to the surge in unemployment from the pandemic and government lockdowns, the seven-year break-even premium rate was forecast at $1.93 per $100 of insurable earnings. The $0.35 increase was broken down as $0.29 for the Canada Emergency Response Benefit (CERB), and $0.06 for temporary measures to support the move back to EI.

The government said it was freezing the rate at the current level as a result of the economic impact from the pandemic. It will be crediting the EI operating account for the increases related to CERB.

The maximum insurable earnings (MIE) for 2021 will increase to $56,300 from $54,200 in 2020, the CEIC said. The MIE represents the ceiling up to which EI premiums are collected and the maximum amount considered in applications for EI benefits.

The maximum annual EI contribution for employers will increase by $46.46 to $1,245.36 per employee; for workers, the maximum will increase increase by $33.18 to $889.54.

The government will provide more than $1 billion in premium reductions in 2021 to registered employers and their employees “shared 7/12 and 5/12, respectively, in recognition of savings generated to the EI program by employer registered short-term wage-loss plans,” a release said.

For self-employed Canadians who opt in to the EI program, the annual earnings required in 2020 will increase to $7,555 for claims filed in 2021.

In Quebec, which administers its own plan, the premium covered under the Quebec Parental Insurance Plan (QPIP) will be $1.18 per $100 of insurable earnings, while employers will pay $1.65.

The maximum annual contribution for a worker in Quebec will increase by $13.94 to $664.34. For Quebec employers, the maximum is up $19.52 to $930.08 per employee.