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Normandin Beaudry

The 2007 Social Security Programs Parameters

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There, in black and white

Bulletin NB Vol. 9 N. 12, December 2006

As in previous years, we are pleased to inform you about the parameters that will be used by the major social security programs in 2007.

The Quebec Pension Plan and the Canada Pension Plan

The Year’s Maximum Pensionable Earnings (YMPE) for year 2007 will be $43,700, an increase of 3.8% over the 2006 YMPE ($42,100). The basic exemption remains at the current level of $3,500, which is the level applicable since January 1, 1998. Employee and employer contribution rates will remain at 4.95% of contributory earnings in 2007. The annual maximum contribution is $1,989.90. The maximum monthly retirement pension at age 65 is set at $863.75 for 2007, based on the average YMPE over the last five years.

Employment Insurance

On November 9, 2006, the Canada Employment Insurance Commission confirmed a reduction of $0.07 in the premium rate for employees effective January 1, 2007. The premium rate for employees in Quebec will then be reduced from $1.53 to $1.46 per $100 of insurable employee earnings. For employers in Quebec, the premium rate will be reduced from $2.14 to $2.04, which is 1.4 times the employee rate outlined above. These rates consider the Quebec Parental Insurance Plan (QPIP) in place since January 1, 2006.

The Employment Insurance premium rates for employees and employers outside Quebec will be reduced respectively from $1.87 to $1.80 and from $2.62 to $2.52 per $100 of insurable employee earnings. The maximum insurable earnings will increase from $39,000 to $40,000 for the year 2007.

Employer contributions can be further reduced for employers offering a salary continuation program (SCP) registered with the Employment Insurance Commission. There are four types of SCPs each offering a unique Employment Insurance premium rate reduction.

Type 1: SCP based on the accumulation of paid sick days of at least one day per month and a maximum of at least 75 days.
Type 2: SCP based on the accumulation of paid sick days of at least one day and 2/3 per month and a maximum of at least 125 days.
Type 3: SCP providing a weekly indemnity1 for at least 15 weeks.
Type 4: SCP providing a weekly indemnity1 for at least 52 weeks (this reduction is only available to employers of public and para-public sectors).

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1 The SCP weekly indemnity must be at least equal to the benefits provided by the Employment Insurance.

 

Employer Premium Rates as of January 1, 20071

         Reduced Rates 2
       
 Regular Rates      Applicable
Rates
Employee
Premium Factor
 
   
SCP
Type
QuebecOther
Provinces
 ReductionQuebec 3Other
Provinces
Quebec 3, 4Other
Provinces 5

1$2.04$2.52  $0.26$1.78$2.26 1.222 1.256
2$2.04$2.52  $0.38$1.66$2.14 1.140 1.189
3$2.04$2.52  $0.36$1.68$2.16 1.153 1.200
4$2.04$2.52  $0.39$1.65$2.13 1.133 1.183

1 Per $100 of insurable employee earnings.
2 The reduced premium rates are applicable for one complete year. In the event a plan is registered during the year, an adjustment is applied to the premium rate in proportion with the time of registration.
3 For employers in Quebec for which all employees work in Quebec.
4 Premium factor to be applied to the employee premium rate of $1.46 per $100 of insurable employee earnings.
5 Premium factor to be applied to the employee premium rate of $1.80 per $100 of insurable employee earnings.


 Quebec Parental Insurance Plan (QPIP)

The QPIP contribution rates for year 2007 per $100 of insurable income will remain equal to $0.416 for employees, $0.583 for employers and $0.737 for self-employed workers. The maximum insurable income will increase from $57,000 to $59,000 for the year 2007.

Régime d’assurance maladie du Québec

The current contribution rate will remain unchanged for the year 2007. This rate is set at 4.26% of total payroll for certain public-sector employers and for companies with a total payroll of more than $5 million. For companies with a total payroll of less than $1 million, the rate is set at 2.70% of total payroll. For companies which have a total payroll of more than $1 million but less than $5 million, the rate is a function of total payroll and ranges from 2.70% to 4.26% of total payroll according to the following formula:

2.31% plus (0.39% of total payroll divided by $1 million).

Commission de la santé et de la sécurité du travail

The contribution rate to the Commission de la santé et de la sécurité du travail is a function of the type of industry and, if applicable, of the claims experience. The maximum earnings for the income replacement benefit will increase from $57,000 to $59,000 for the year 2007.

Commission des normes du travail

The current contribution rate will remain unchanged for the year 2007, and is set at 0.08% of earnings subject to contribution. The earnings subject to contribution will increase from $57,000 to $59,000 for 2007.

 

Please feel free to contact us for additional information.

514.285.1122
 
630, René-Lévesque Blvd. West, 30th floor
Montreal, Quebec, H3B 1S6