By Peter Shout

(SP) Toronto - After a two-year moratorium, Finance Minister Jim Flaherty said Thursday that Canada's employment insurance premium will rise when the new budget comes into play.

Speaking to reporters in Kitchener Thursday, Flaherty said employment insurance premiums had been frozen as part of the Economic Action Plan, but with the new budget about to be prepared, now its a different matter.

"They were frozen as a measure to help Canada come out of recession," explained Flaherty.

With Canada's economy improving, said the Minister, Ottawa has no plans to continue with the freeze.

Rumors have been circulating that employment insurance premiums could rise as much as 10 per cent, prompting Flaherty to address the issue.

On Saturday, Ottawa will initiate a plan to end five-week extended unemployment benefits to Canadian workers and up to twenty weeks for long-tenured workers, which was enacted during the throws of the recession on the Canadian economy.

While Flaherty said Ottawa will continue to monitor the situation, the plan is to wind down the EI system.