Canada's budget watchdog says employment insurance premiums will have to rise by 35 per cent if the fund is expected to return to nearly balancing in four years.

A study by staff at the Office of the Parliamentary Budget Officer, Kevin Page, estimates EI premiums paid by workers and employers will need to rise by the maximum annual allowable limit of 15 cents per $100 of insurable earnings.

The Parliamentary Budget Office says EI premiums will have to rise by 35 per cent if the fund is to come close to balancing by 2014. (CBC)

That means that by 2014 a typical worker would have to pay $223 more a year and an employer would have to contribute $312 more, for a total per worker of $535 annually, a 35 per cent increase.

The study projected that the combination of the increased premiums, more workers and higher wages would make EI revenue grow from $16.2 billion last year to $27.1 billion by 2014.

But it estimated the fund will still be in the red by $700 million by 2014, and its maximum deficit will be $10.7 billion in 2011.

Currently, Ottawa has frozen premiums until 2011 as part of the two-year stimulus package to deal with the recession.