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Canada's budget watchdog says employment insurance premiums are going up, and by a lot.

The parliamentary budget office estimates that EI premiums paid by workers and employers will need to rise by the maximum allowable limit of 15 cents per $100 of insurable earnings to return the fund to near balance in five years.

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That would hike annual contributions per worker by $535 - with about $223 more being paid by the employee and $312 by the employer.

The maximum EI contribution paid by employees now is just over $730 per year.

The combination of the increased premiums, more workers and higher wages means that Ottawa's EI revenues will grow from $16.2-billion last year to $27.1-billion by 2014.

But the budget office estimates the fund will still carry a $700-million deficit by 2014 after hitting a peak shortfall of $10.7-billion in 2011.

Currently, the government has frozen contribution premiums until 2011 as part of the two-year stimulus package dealing with the recession.

Opposition critics have described the premium increase as a new tax on workers, although the government views the EI as a self-financing insurance fund supported by workers and employers.

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