29 August 2023
Hon. Chrystia Freeland
Deputy Prime Minister and Minister of Finance, Finance Canada
90 Elgin, Ottawa, Ontario K1A 0G5
Via email: email@example.com
Dear Minister Freeland,
We are writing to you today to express the concern of the members of the chambers of commerce in Greater Moncton, the Saint John Region and the Fredericton area about the federal government’s intentions to increase employment insurance premiums for employers and employees to cover pandemic program cost overruns. Notably, employers pay 58% of EI premiums (1.4 times what employees pay) and therefore are disproportionately affected by covering the EI fund debt that was largely caused by COVID-19 program spending that used the EI mechanism to deliver funds during the pandemic.
We understand new premium rates are expected to be announced soon and will continue to increase in 2024 to pay down the cost of the current cumulative $27 billion deficit in the Employment Insurance Operating Account. Of that deficit, more than $23 billion are costs stemming from COVID-19 temporary measures.
Our chambers were supportive of government efforts to support businesses and employees during the pandemic. Without the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Business Account (CEBA) loans, many businesses would not have been able to stay open and many families would have suffered greatly.
The primary issue from our perspective is that employers will pay a disproportionate amount of the EI debt – 58 per cent. Pandemic benefits were given to people who were not eligible for EI yet the EI fund for which employers pay the majority share, is on the hook.
Increasing EI premium costs to employers at a time when their sustainability is still in jeopardy due to inflationary costs, higher interest rates, and labour challenges, places an undue burden on many Canadian SMEs. We believe the federal government should use other financial resources to bring the EI account back into balance while employers and employees are struggling to regain a solid footing.
At the same time, we strongly urge your government not to entertain the idea of making EI more accessible to Canadians. There are close to one million open jobs across our country and it is critical that as part of any EI reform, we return the system to its original intent – to be a true insurance program to provide short-term financial support for someone while they look for work. In this labour market, it cannot continue to be a competitive force against the natural supply and demand for labour.
We call on the federal government to either extend the premium freeze for employers and employees, or find an alternative debt-reduction revenue source to prevent more financial pain to companies still struggling to get back to a sense of normal.
Our chambers remain ready to play a role in crafting an improved Employment Insurance system that delivers benefits to those in need without causing undue harm to labour supply.
John Wishart, CEO, Chamber of Commerce for Greater Moncton
Krista Ross, CEO, Fredericton Chamber of Commerce
David Duplisea, CEO, Saint John Region Chamber of Commerce
cc: Hon. Randy Boissonnault, Minister of Employment, Workforce Development and Official Languages
cc: Hon. Ginette Petitpas-Taylor, Minister of Veterans Affairs / Associate Minister of National Defence, MP for Moncton-Riverview-Dieppe
cc: Jenica Atwin, MP, Fredericton
cc: Wayne Long, MP, Saint John-Rothesay