EXTRA Vol. 144, No. 1

Canada Gazette

Part II

OTTAWA, FRIDAY, JANUARY 22, 2010

Registration
SOR/2010-11 January 13, 2010

EMPLOYMENT INSURANCE ACT

Regulations Amending the Insurable Earnings and Collection of Premiums Regulations

The Minister of National Revenue, pursuant to subsection 152.26(5) (see footnote a) of the Employment Insurance Act (see footnote b), hereby makes the annexed Regulations Amending the Insurable Earnings and Collection of Premiums Regulations.

Ottawa, December 24, 2009

JEAN-PIERRE
Minister of National Revenue

P.C. 2010-23 January 13, 2010

Her Excellency the Governor General in Council, on the recommendation of the Minister of National Revenue, pursuant to subsection 152.26(5) (see footnote c) of the Employment Insurance Act (see footnote d), hereby approves the annexed Regulations Amending the Insurable Earnings and Collection of Premiums Regulations, made by the Minister of National Revenue.

REGULATIONS AMENDING THE INSURABLE EARNINGS AND COLLECTION OF PREMIUMS REGULATIONS

AMENDMENT

1. Section 18 of the Insurable Earnings and Collection of Premiums Regulations (see footnote 1) is amended by adding the following after subsection (2):

(3) For the purposes of subsection 152.26(1) and (2) of the Act, the prescribed rate in effect is the same as that set out in paragraph (2)(a).

COMING INTO FORCE

2. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue and objectives

Recently, the Fairness for the Self-Employed Act was enacted to extend Employment Insurance (EI) special benefits (maternity, parental, sickness and compassionate care) to eligible self-employed individuals. As part of this initiative, Part VII.1 has been added to the Employment Insurance Act (EIA) such that self-employed Canadians who opt into the EI program will be required to make premium payments. Where a self-employed person pays less than the required premium or instalment, new section 152.26 of the EIA requires interest to be paid to the Receiver General at a rate prescribed by regulation. The purpose of this regulatory amendment is to establish the applicable rate of interest payable by a self-employed person under section 152.26.

Description and rationale

Section 18 of the Insurable Earnings and Collection of Premiums Regulations (the Regulations) currently establishes the quarterly rate of interest to be paid on amounts owing to the Receiver General under the EIA. Section 18 is being amended to indicate that, for purposes of subsections 152.26(1) and (2) of the EIA, the prescribed rate of interest will be determined in the manner set out in paragraph 18(2)(a) of the Regulations. As such, for purposes of section 152.26 of the EIA, the prescribed rate of interest during a particular quarter is computed by reference to the average rate of Treasury Bills that mature within approximately three months of their date of issue and that are sold during the first month of the preceding quarter, plus 4%.

The payment and collection of EI premiums for self-employed individuals that opt into the EI program, and any applicable interest charges, will be done through the existing tax system by the Canada Revenue Agency (CRA) in a manner similar to Canada Pension Plan contributions on self-employed earnings. As such, there should be minimal additional costs or savings to the government or industry associated with these Regulations.

Consultation

Human Resources and Skills Development Canada were consulted to ensure that this regulatory amendment pertaining to the introduction of Part VII.1 of the EIA is in support of the new legislative framework. Consultation with the general public was not conducted as the interest rate to be paid by a self-employed person on overdue EI premiums or instalments is consistent with the existing interest rate applied to other amounts owing to the Receiver General under the EIA.

Implementation, enforcement and service standards

The administration and collection of premiums will be done through the existing tax system by the CRA such that EI premiums for a year will be due by the “balance-due day” for the taxation year, with any applicable instalment requirements determined for future years. With respect to interest payable by a self-employed individual pursuant to section 152.26, the EIA provides sufficient compliance measures for these Regulations, including the right to garnishee an amount for the collection of unpaid interest.

Contact

Ray Cuthbert
Director
CPP/EI Rulings Division
Legislative Policy Directorate
Telephone: 613-952-5422
Email: Ray.Cuthbert@cra-arc.gc.ca

Footnote a
 S.C. 2009, c. 33, s. 16

Footnote b
 S.C. 1996, c. 23

Footnote c
 S.C. 2009, c. 33, s. 16

Footnote d
 S.C. 1996, c. 23

Footnote 1
 SOR/97-33

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