OTTAWA – Canadians should brace themselves for a new round of job cuts and layoffs if Finance Minister Jim Flaherty lets employment insurance premiums rise, Flaherty’s critics said Thursday.

Flaherty, visiting Kitchener, Ont., told reporters a recession-fighting freeze on employment insurance premiums will be lifted at the end of the year, as the government promised in its 2009 budget.

But critics say Flaherty needs to be more flexible and that Canada’s economy isn’t ready to absorb higher payroll taxes.

“For many companies this could be the tipping point in terms of whether or not they continue in business,” said Jayson Myers, an economist and CEO of the Canadian Manufacturers and Exporters, one of the country’s biggest business lobby groups. “I think there’s a lot of bankruptcies waiting to occur out there. [Raising premiums] is going to be a major drag on job creation.”

Meanwhile, a program that gave extra weeks worth of EI benefits is also set to end.

In early 2009, Ottawa said it would pay benefits to unemployed people to a maximum of 50 weeks for eligible recipients in some parts of the country rather than the traditional 45 weeks. Some older workers qualified for an extra 20 weeks.

While anyone currently receiving a claim will continue to be eligible for the extra weeks, anyone filing a new EI claim as of Monday will not be eligible for those extra weeks.

As of February, more than 500,000 people had claimed those extra five weeks at a cost to the federal treasury of $734 million.

Those extra bills for increased payouts from the employment insurance fund is one reason why premiums are set to rise.

Premiums are paid by both employers and employees. Right now, employees are nicked for $1.73 in insurance premiums for every $100 they earn. Rates could jump on Jan. 1 by as much as 15 cents – the legal maximum for a single-year increase - to $1.88 per $100 earned. The maximum single-year increase for employers is 21 cents.

“With so many Canadians out of work and so many Canadians afraid they’re going to lose the jobs they have right now it is asinine to raise job-killing payroll taxes,” said Liberal MP Scott Brison, his party’s finance critic.