The first paycheque of the year will be a tiny bit lighter for most Canadians as increases to employment insurance (EI) premiums take affect.
The changes increase the amount of insurance Canadians pay on $100 of wages from $1.72 to $1.78 and the amount employers pay will rise from $2.42 to $2.49.
The government has previously increased the amount of earning that was insurable under the program, but this is the first actual rate increase.
Despite the increase to the rates, the first since 1994, EI premiums remain at a historic low.
The maximum amount the program insures is approximately $44,000 of income per year. Based on that level of income, the EI increases combined with increases to Canadian Pension Plan will see people pay about $76 more per year in payroll taxes.
The increase is lower than what the Canadian Employment Insurance Financing Board, created in 2008, recommended because of the drain on the system due to the recession.
The board wanted an increase of 15 cents on employees and 21 cents for employers, but the government rejected the bigger increase as a possible job killer.
Scott Hennig of the Canadian Taxpayer Federation said the increase is partially because of a need to refill the fund after several years of high unemployment, but the federal government has also placed employment programs into the fund that Henning said don't need to be there.
"The federal government has jammed a bunch of social programs essentially into the EI fund over the last couple of years, which have really drained down that fund."
Hennig said those job-creation programs rightly belong inside the Ministry of Human Resources and not inside what should be an insurance program.
"We would think that would be a better place for these and keep EI as a strict insurance program rather than as a sort of department of jobs."
Among the programs being funded out of the EI fund are $956 million for skills training, $423 million for job search and counselling benefits and $136 million to help start self-employed business.
Income taxes holding steady
Income tax rates are not increasing in Alberta or federally this year, but the federation argues some people will pay more as their wages rise faster than inflation.
The exact amount varies from province to province and depends on income, but because wages are rising, some Canadians will pay a higher percentage of their income in taxes.
Hennig said while the government does move tax brackets up to reflect inflation, they don't move quickly enough in some provinces.
"In Alberta and Ontario where the national average is higher, we tend to see a bit of bracket creep because our wages are growing faster than the tax brackets are."
